Congress has a little over two weeks to pass legislation reforming the system used to set Medicare payment for physicians or to extend the short-term fix already in place. If lawmakers do not act by March 31, physician payment under Medicare will be cut by 20.1 percent.
The House is expected to vote March 14 on legislation (H.R. 4015) that would overhaul the Medicare physician payment system, but if the measure includes a controversial delay of the Affordable Care Act’s “individual mandate” as a possible way to pay for the overhaul, it is unlikely to advance in the Democratic-controlled Senate.
House Republicans March 12 unveiled a plan to pay for the overhaul by delaying the individual mandate penalty in the Affordable Care Act for five years. The delay would save about $169 billion from 2014 to 2024, according to the Congressional Budget Office (CBO).
While lawmakers agreed on the general framework of reform, they remain divided on how to pay for it. The CBO on Feb. 27 said the reform legislation would cost $138 billion from 2014 through 2024. The estimate is in the midrange of scores the CBO gave to earlier versions of compromise legislation.
House Minority Whip Steny Hoyer (D-Md.) has called paying for the bill by delaying the mandate a “poison pill,” and Senate Majority Leader Harry Reid (D-Nev.) said March 11 the offset is evidence that Republicans aren’t serious about enacting a doc pay fix.
Because of the difficulty in paying for a long-term reform, it is likely that Congress will end up passing another shorter-term measure, perhaps through the end of 2014 (and after the midterm elections). Even then, lawmakers will have to find ways to pay for any fix to the physician payment formula.
Among provisions that Congress could implement to help pay for the sustainable growth rate fix are a couple that would affect clinical laboratories and pathologists. Lawmakers could adopt the proposed clinical laboratory payment cuts included in the president’s proposed budget for 2015, which would provide almost $8 billion over 10 years. They also could adopt the proposal to close the in-office ancillary services (IOAS) loophole in the Stark law, which would save more than $6 billion over 10 years.
Laboratory and pathology groups are urging Congress to spare clinical and anatomic pathology labs from further Medicare cuts, noting that closing the IOAS loophole would provide significant funding for physician payment reform.
Takeaway: The House and Senate are still split on how to pay for proposed reform of the system used to set Medicare payment for physicians. If they can’t agree on pay fors, Congress is likely to pass another short-term “doc fix.”
