Last-minute negotiations before Congress' scheduled Christmas recess produced a funding package for much of the federal government, including a decrease for HHS. But at deadline, lawmakers had failed to reach a deal averting a 27.4% Medicare physician pay cut.
Doc fix left hanging
Federal funding package would cut HHS budget
On Friday, the House passed and the Senate was expected to pass legislation that included a series of bills to fund federal agencies for fiscal 2012. The plan contains $69.7 billion for HHS, which is about $700 million less than the prior year's level and $3.4 billion below President Barack Obama's 2012 budget request.
HHS' Health Resources and Services Administration would see its funding drop from the 2011 level, while the Centers for Disease Control and Prevention would see an increase. The legislation contains $6.5 billion in funding for HRSA in 2012, about $41 million less than the agency had in 2011, while the Atlanta-based CDC would see an increase of about $38 million to a program level of $6.1 billion.
According to a summary, the CDC funding provides $80 million for the Preventive Health and Health Services Block Grant program, which both the president and the Senate had proposed eliminating.
The legislation also provides $3.9 billion for CMS program management, reflecting an increase of $241 million from the prior year's level—but still $517 million below what the president had requested. “Since 2000, the number of CMS beneficiaries (those receiving Medicare, Medicaid and Children's Health Insurance Program benefits) has increased by 51%—partially because of an aging U.S. population. The bill attempts to keep pace with the increase in beneficiaries to ensure those who rely on these important programs get the benefits they need,” a congressional summary of the bill noted.
And the National Institutes of Health is also set to receive a funding increase, as the bill provides NIH with $30.7 billion in funding for 2012, which is $299 million higher than the previous year's funding level, although still $758 million below the president's request.
Meanwhile, a provision to prevent a cut in Medicare physician reimbursements was included in bills to extend Social Security tax cuts. That measure became mired in partisan battles over both differing approaches to pay for the spending provisions and various policy riders.
House members acted first by passing a tax cut extension bill on Dec. 13 that included a two-year continuation of the current physician payment rates, plus a 1% payment increase in 2012 and 2013. The $38.9 billion fix to the sustainable growth-rate formula aimed to give lawmakers time to find a permanent change to Medicare's physician payment program.
Also included in that legislation were measures to extend several Medicare provisions that are set to expire, such as maintaining the add-on payment increases for ground ambulance services, and extending the Qualified Individual Program, which provides assistance to low-income seniors for their Medicare Part B premiums.
The bill drew strident opposition from hospital advocates based on the roughly
$17 billion in reduced payments to hospitals used to help pay for the two-year physician-payment fix.
Senate Democrats also blasted the bill for cuts to the Patient Protection and Affordable Care Act, such as using $8 billion from the law's prevention and public health fund and $13.4 billion in insurance exchange subsidies to fund the physician-payment fix.
Subsequent to the House passing its version Dec. 13, the doctor-payment fix was ensnared in extended closed-door negotiations in the Senate, where Democratic leaders declined to introduce their own version until a deal on the overall tax package was reached with House Republican leaders. The ways that the House bill would fund the physician and tax-cut provisions was the key stumbling block, according to Senate sources.
Various options were under consideration late in the week, Senate sources said. They included an extension of current Medicare pay rates for less than one year, but no deal was reached before deadline.
Senate Democrats remained tight-lipped throughout the week on the specific physician-payment timeline they were likely to approve, although sources assured reporters that they would not allow the steep cut to physicians to take effect as scheduled Jan. 1.
Part of the pressure on Senate Democrats for a shorter extension came from hospital advocates, who launched a national print advertising campaign during the week on the issue and specifically urged senators to block the House approach, based on its reliance on hospital cuts for funding.
“Eliminating planned cuts to physicians in Medicare is aimed at ensuring access to care for our nation's Medicare beneficiaries,” a coalition of hospital groups wrote in a letter to senators Dec. 14. “Simultaneously cutting hospital payments defeats the purpose, by raising new barriers to access.”
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