Temporary 'doc-fix' agreement reached, Boehner says

(Story updated at 5 p.m. ET)

Another temporary 12-month patch will be enacted for the “doc fix” prior to the scheduled March 31 expiration of the current patch, House Speaker John Boehner (R-Ohio) indicated Wednesday. The House bill authorizing the latest patch also includes provisions to extend the deadline for ICD-10 implementation to at least October 2015 and a provision which would give hospitals until March 2015 to comply with a controversial new inpatient payment rule for hospitals known as the two midnight rule.

Whether the full House and Senate will go along with all the additional provisions added on to the doc fix remains an open question, but a vote on the House bill is likely Thursday with a Senate vote, assuming House approval, on Friday.

There will be no permanent doc fix prior to the deadline, because House and Senate leaders still haven't settled on how to pay for permanent repeal and replacement of Medicare's unpopular sustainable growth-rate formula for physician payment.

Boehner said he has instead worked out a deal with Senate Majority Leader Harry Reid (D-Nev.) on a 12-month patch in order to avoid a 24% reduction in payments to doctors who treat Medicare beneficiaries. The House is expected to take up the patch bill Thursday, with the Senate taking action shortly thereafter.

“That does not preclude any work from being done on the long-term fix in terms of how we pay doctors,” Boehner said at a press conference Wednesday. “I think we need to take this step first.”

The Congressional Budget Office has not yet released an analysis of the legislation. But the one-year patch is expected to cost roughly $20 billion. A significant chunk of that money will be generated through a budget gimmick: extending sequester cuts beyond the 10-year window used for budget scoring purposes.

Loren Adler, research director at the nonpartisan watchdog group, the Committee for a Responsible Federal Budget, estimates savings at $7 billion to $8 billion. The same tactic was used for the prior three-month patch.

“This is a new trick that they've developed and fallen in love with,” Adler said. “I'm expecting this as a yearly occurrence now.”

But there are some proposals that will actually reduce spending. For instance, the bill achieves roughly $4 billion in savings by extending the Medicaid Disproportionate-Share Hospital payments that were part of the Patient Protection and Affordable Care Act. In addition, it sets up a program whereby doctors who order a disproportionately large number of imaging tests for Medicare patients will be required to get advance approval for those tests.

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