CQ TODAY ONLINE NEWS – HEALTH
Aug. 3, 2011 – 6:09 a.m.
‘Doc Fix’ Lobbying Likely to Center on New Deficit Panel
By Emily Ethridge, CQ Staff
Health care provider groups should expect to get hit with Medicare payment cuts later this year, industry observers say, and the joint committee created in the debt deal is the best chance to minimize the damage.
Doctor groups were disappointed that the final debt limit plan (
That means physicians will be lobbying hard for the plan’s powerful joint deficit reduction committee to address the reimbursement rate issue, known on Capitol Hill as the “doc fix,” in hopes that a solution will be less painful overall.
“It’s like pick your poison,” said Julius Hobson, a former lobbyist for the American Medical Association (AMA). “There’s a tall glass and a short glass. Which one do you want?”
Groups are already signaling their hope that the joint committee will resolve the matter — even though it likely means getting some amount of cuts. They say the ongoing uncertainty over reimbursement rates can lead physicians to limit the number of Medicare patients they accept, or to stop seeing them altogether.
“We expect the Medicare physician payment issue will be among those the committee will address, as everyone agrees that a 30 percent cut in payments to those who care for Medicare patients would hurt seniors’ access to the health care they need,” said AMA President Peter W. Carmel.
Shawn Martin, director of government relations for the American Osteopathic Association, said his group hopes the committee will enact a long-term fix.
“This is a unique opportunity to use the process, which has a guaranteed up or down vote, to enact policies that will protect beneficiaries’ access to physician services,” Martin said. “Of course this will be difficult and will require the needed financing.”
‘Déjà Vu All Over Again’
The joint committee is tasked with agreeing on $1.5 trillion in savings, some of which is likely to come from entitlement programs, by late this year. That is around the same time that lawmakers will be seriously looking at how to stave off the 29.5 percent cut in reimbursement rates physicians will experience when the current patch runs out.
If the committee deadlocks or its plan is not enacted, it would trigger across-the-board cuts that could hit up to 2 percent of Medicare’s total spending — and providers are expected to be the main target since beneficiaries are shielded in the law. In a worst-case scenario, providers would take a 29.5 percent hit in rates if the current patch expires, followed by another 2 percent cut in fiscal 2013, said Hobson, now a senior analyst with the law firm Polsinelli Shughart.
A. Barry Rand, the CEO of AARP, said, “We also are concerned about the potential use of a trigger that would arbitrarily cut provider payments under Medicare, which could unfairly shift costs to seniors.”
Physicians’ best hope, experts said, is to try to lobby the joint committee to come up with some solution that would provide more payment certainty and prevent multiple cuts. But the cost of changing the flawed reimbursement formula is high — estimated at about $300 billion for 10 years — and is expected to grow with time.
‘Doc Fix’ Lobbying Likely to Center on New Deficit Panel
“This is just another lovely chestnut the joint committee gets to deal with,” said Dan Mendelson, a Clinton administration budget official. “Problem is, the [formula] is about $25 billion a year that runs in the wrong direction.”
The cost of changing the formula will need to be offset with other savings, which most likely will come from other health care sectors as it has in the recent past. Debates over those offsets held up several of the five patches postponing the cuts that Congress passed in 2010.
“When the joint committee does its thing, it’s going to be déjà vu all over again — all the offsets we know and love or hate will be back,” said Mendelson, now CEO of health consulting firm Avalere Health.
Double Lobbying
At the same time, lawmakers in the House have been looking into ways to replace the troubled system for months, with the goal of holding votes on legislation this fall. Two House committees — Energy and Commerce, and Ways and Means — held hearings on the issue this year, where provider groups suggested a five-year period of stable reimbursement rates to work on finding on a permanent formula replacement.
But any solution from the regular committees could run up against changes proposed by the deficit reduction committee. And that means physician groups will be busy lobbying both, Hobson said.
“What it really means is, you have to step up your lobbying game,” he said. “You can’t go lobby the supercommittee and ignore the other committees, because they’re going to want to do their work.”