(Story updated at 4:35 p.m. ET.)
WASHINGTON—Congressional leaders Thursday announced a bipartisan, bicameral deal to permanently repeal Medicare's loathed sustainable growth-rate formula for paying doctors. Bills containing terms of the deal were introduced in both chambers of Congress.
Unclear for now, though, is the fate of the Children's Health Insurance Program and the exact details of how it will be financed.
The legislation, if enacted, would end one of Washington's longest-running fiscal battles and bring welcome stability to payments for doctors who treat Medicare patients. Congress has passed 17 consecutive short-term fixes dating back more than a decade. A vote is anticipated next week. Doctors would face a 21.2% cut in payments on April 1 if no legislative fix is enacted.
“As a doctor, I know firsthand just how destructive the SGR formula has been to America's seniors and their providers,” said. Rep. Michael Burgess (R-Texas), the chief sponsor of the House legislation, in a statement. “Finally, after unparalleled progress in recent years, both sides of the aisle have begun to understand that the long-term solvency of our Medicare system depends on taking this fight head-on together.”
The “doc fix” deal was negotiated by House Speaker John Boehner and Minority Leader Nancy Pelosi in recent weeks behind closed doors. But key committee members have signed on. Sponsors of the legislation included Rep. Paul Ryan (R-Wis.), chair of the House Ways and Means Committee and Sen. Orrin Hatch (R-Utah), chair of the Senate Finance Committee.
Boehner and Pelosi negotiated a $213 billion deal that also would extend CHIP funding by two years. The additional spending would be partially offset by $70 billion in spending reductions. Those reductions would be split between reductions to Medicare benefits and cuts to provider payments.
"It's a chance to get rid of Washington's most infamous budget gimmick,” Boehner said at a Capitol press conference shortly before the deal was announced.
But the legislation introduced Thursday is essentially the same policy bill that was introduced last year to much fanfare. That deal collapsed when negotiators couldn't agree on how to pay for the package.
This time around there appears to be tentative agreement on a financing package, although final details are still subject to change, according to staffers monitoring the discussions.
“It's something that has to happen,” Pelosi said at a press conference Thursday, when asked about SGR repeal. “It's not a doc fix. It's a fix for America's seniors so that they can continue to see their doctors under Medicare.”
A particular sticking point could still be the CHIP issue. The Boehner-Pelosi deal calls for a two-year extension of the program. But Senate Democrats have threatened to withhold their support if it doesn't include a four-year extension.
Sen. Ron Wyden (D-Ore.), the ranking member of the Finance Committee, pointedly did not add his name to the SGR repeal bill. “At this point, it is not clear what our House colleagues will ask America's seniors and providers to pay, and the impact that new financial demands will have on them both,” Wyden said in a statement explaining his rationale for withholding support. “Every Democrat in the Senate has cosponsored a clean, four-year extension of CHIP. … Yet negotiators in the House seem willing to settle for less, even though extending funding for this widely popular program would amount to pennies on the dollar in terms of the total cost of the House package.”
Bruce Lesley, president of First Focus, a children's healthcare advocacy group, said there's a concern that if CHIP is only extended for two years, it could replace SGR as a perennial legislative vehicle that attracts all kinds of additional proposals. “There's a perception that no one does harm to kids,” Lesley said. “So people like to hostage-take with our issues.”
There are also potential political perils remaining on both sides of the aisle.
Liberal advocacy groups have generally been muted in their criticism of the deal, despite changes to Medicare benefits that will increase costs for beneficiaries with incomes above $133,000 and eventually eliminate first-dollar-coverage Medigap plans.
Conservatives have splintered over the issue. Americans for Tax Reform, the influential anti-tax organization, has backed the deal. But other advocacy groups have blasted it for failing to fully pay for the increase in Medicare expenditures. The nonpartisan Committee for a Responsible Federal Budget released an analysis Thursday showing that the deal would add $400 billion to the federal deficit by 2035—a statistic that's sure to stir unrest among budget hawks.
Robert Moffit, a healthcare policy expert at the conservative Heritage Foundation, decried the secretive talks between Pelosi and Boehner. “It's a very bad way to do something of this magnitude," Moffit said. “This rotten process is going to present members of Congress with a fait accompli.”
Stan Collender, a former top staffer on both the House and Senate budget committees, thinks the SGR deal probably has the votes to pass in the House. But he suggests that it could still get hung up in the Senate if ardent fiscal conservatives (and presidential hopefuls) like Sens. Ted Cruz (R-Texas) and Rand Paul (R-Ky.) decide to filibuster it.
“The votes may be there to overcome a filibuster, but it's not going to be easy,” said Collender, who is now executive vice president and national director of the Washington-based consulting firm Qorvis MSLGROUP. “There's at least a 33% chance, if not higher, that this just doesn't happen.”
The calendar also could present problems. Congress is supposed to adjourn next Thursday for the Easter/Passover break. That leaves little time for any missteps. If Congress doesn't take action by the end of the month, doctors would face a 21.2% cut in Medicare payments on April 1.
A senior House staffer who has worked closely on the issue expressed optimism that the deal will get passed, but noted that “it's not done until it's done.”
Follow Paul Demko on Twitter: @MHpdemko