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Healthcare Business News

Budget bill with short-term SGR fix clears Congress, ready for Obama to sign

By Jessica Zigmond
Posted: December 18, 2013 - 6:15 pm ET

The Senate on Wednesday approved the House-passed budget agreement that also extends Medicare's current physician payment levels through March, averting a 23.7% payment cut to doctors on Jan. 1.

In a 64-36 vote, the upper chamber passed the two-year budget deal that includes a temporary fix to Medicare's problematic sustainable growth-rate formula and extends some expiring Medicare and other healthcare programs.

Last week, the nonpartisan Congressional Budget Office (PDF) estimated the cost for the short-term physician payment fix and the other healthcare provisions will cost about $8.3 billion over 10 years. Lawmakers agreed to pay for that in large part by revamping the payment system for the nation's long-term acute-care hospitals.

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The budget agreement, which now moves to President Barack Obama's desk, sets top-line spending levels for the next two years. It leaves it up to congressional appropriators to draft individual spending bills for all federal departments by Jan. 15, the expiration date on a short-term resolution funding the government.

Cheering the passage of the House bill late last week, House Appropriations Committee Chairman Hal Rogers (R-Ky.) said in a statement he's confident that he and his colleagues on the House and Senate appropriations committees are "up to the task" of drafting, negotiating and passing the appropriations bills in just over one month.

The general consensus in Washington is that lawmakers will reach agreements quickly in order to avert another government shutdown.

Paul Van de Water, a senior fellow at the left-of-center Center on Budget and Policy Priorities, said the higher spending level in the budget deal will make it easier for them to do so rather than defer to automatic sequestration cuts triggered by the Budget Control Act of 2011.

The Labor, HHS and Education appropriations legislation, however, is always one of the more troublesome bills, he said, because it contains several difficult issues that lawmakers must address. Van De Water cited administration spending levels for the CMS as one example because it provides the levels for administering health reform.

The budget agreement itself has a modest effect on the healthcare sector, according to Van de Water. It adds another two years of 2% Medicare sequestration cuts—which the nation's hospitals criticized last week—but it also allows more discretionary spending for the National Institutes of Health and other programs.

All of Washington's significant challenges- including a permanent repeal of the SGR and longer-term fiscal issues—have yet to be addressed, he noted. And more substantial changes to Medicare could likely play a part in those larger budget discussions.

Meanwhile, lawmakers face another potential spending showdown in the new year when Congress again must raise the nation's debt ceiling. If Republicans treat it as another opportunity for “budget hostage-taking,” Van de Water said, “Medicare will be one of the hostages.”

Follow Jessica Zigmond on Twitter: @MHjzigmond

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