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President Barack Obama

White House calls for healthcare cuts, permanent SGR fix

By Jessica Zigmond
Posted: December 18, 2012 - 12:15 pm ET

The White House has called for a permanent—not temporary—fix to Medicare's sustainable growth-rate formula and about $400 billion in healthcare cuts, according to a source familiar with the fiscal-cliff negotiations.

House Speaker John Boehner (R-Ohio), however, was generally dismissive of the president's new proposal, signaling that a permanent fix to the physician payment system is still not within reach.

During a news conference in the Capitol, Boehner said the GOP leadership plans to introduce a bill this week that would extend current tax rates for Americans who make $1 million or less, but Boehner stopped short of saying whether that legislation would include a temporary fix to Medicare's physician payment formula.

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Boehner told reporters that President Barack Obama's administration offered a plan Monday that called for $1.3 trillion in new revenues and $850 billion in net spending reductions. "That is not balanced in my opinion," Boehner said, adding that his party will continue talks with the president while it simultaneously offers a "Plan B" proposal.

Boehner's response was vague when he was asked if the GOP proposal would encompass issues such as the Medicare physician payment formula, the alternative minimum tax and the looming funding cuts that would take place automatically in early 2013 under the Budget Control Act of 2011.

"We're going to continue to look at how we would address those issues as we put this bill together that we would expect to put on the floor later this week," Boehner said. "But dealing with the alternative minimum tax, dealing with the death tax, could likely be part of the bill we bring to the floor."

Noticeably absent from that list was addressing Budget Control Act's sequestration process, which would trigger across-the-board cuts early next year, including a 2% cut to Medicare rates.

"We would not deal with the sequester," Boehner said.

Also not mentioned was a fix to the SGR formula. Rep. Phil Gingrey (R-Ga.), a physician who serves as co-chairman of the GOP Doctors Caucus, told Modern Healthcare that he voiced support for a Medicare physician payment fix during a GOP conference meeting that took place moments before the news conference.

"I felt very strongly that there should be a doc fix in it," Gingrey said. "And the Speaker did not say one way or another whether there would be a doc fix in it," he said, referring to the House plan that was discussed in the conference meeting. Gingrey said his impression was that "at least on the House side there would not be."

Even if the House proposal does not address the SGR formula, Gingrey said he believes lawmakers will agree to a physician payment fix—likely for one year—in a final deal.

Meanwhile, White House Press Secretary Jay Carney issued a statement indicating negotiations will continue and dismissing Boehner's "Plan B" as a proposal that could not get through the Senate.

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