KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Health Care Overhaul Could Include Changes To Doctor Payments

The Wall Street Journal reports that "Democratic centrists said they won a tentative commitment from the White House to back a proposal to curb the growth of Medicare costs. ... One proposal pushed both by President Barack Obama and some centrists is to give the executive branch the authority to implement cuts to Medicare spending that would be recommended by independent experts. Congress could stop the cuts, but only if it acted swiftly. Fiscal conservatives say that under the current system, which gives Congress more power, lawmakers shy away from politically tough votes to restrain Medicare costs."

"After a more-than-two-hour meeting at the White House Tuesday, centrists said they secured a verbal commitment to add such a mechanism on Medicare cost-cutting to the House bill. White House budget chief Peter Orszag ... said 'I think it's probably the most important piece that could be added to the House legislation'" (Hitt and Bendavid, 7/22).

The Associated Press: "With Congress and the Obama administration groping for a way to restrain the skyrocketing rise in medical costs and restore solvency to the health care program for seniors, the Medicare Payment Advisory Commission could be moved into the executive branch, its clout expanded exponentially." 

"The consequences for thousands of doctors, hospitals, nursing homes and other health care providers under Medicare, the government-run program for seniors, would be sweeping. A bill backed by Sen. Jay Rockefeller, D-W.Va., would give MedPAC's annual recommendations, which are advisory, the force of law unless overridden by Congress. That would be a remarkable grant of authority by lawmakers - an acknowledgment that Congress was politically incapable of reining in Medicare on its own - much as legislation a decade ago put the closure of unneeded military bases on autopilot."

But "MedPAC has its critics, and some lawmakers worry that constituents will hold them responsible for future payment cuts made largely without their involvement." In a letter last month, Sen. Max Baucus, D-Mont., explained that even now, lawmakers are 'sure to listen very carefully to MedPAC's recommendations, particularly on provider payments.' Created by congressional Republicans over a decade ago, MedPAC has 17 part-time commissioners, a staff of 35, and a budget of $10.4 million: "almost infinitesimally small in a government that is on track to spend about $3.8 trillion in the current fiscal year." The administration hopes that increasing the authority of MedPAC would help reign in spending by limiting increases to doctor payments (Espo, 7/21). 

Meanwhile, "House Democrats want to give doctors a $245 billion sweetener that helps ensure their critical support for a health care overhaul bill," The Associated Press reports in a separate story. "Next up: Trying to explain how they could do it without breaking President Barack Obama's promise that health legislation won't increase the federal deficit. ... Democrats and the Obama administration argue that the $245 billion included for doctors - the approximate 10-year cost of adjusting Medicare reimbursement rates so physicians don't face big annual pay cuts - does not have to be counted in the overall cost of the health care bill. Their only-in-Washington reasoning is that they already decided to exempt it from congressional 'pay-as-you-go' rules that require new programs to be paid for. In other words, it doesn't have to be paid for because they decided it doesn't have to be paid for."

"Old policy or new, no one disputes that the 'doc fix' does in fact add to the deficit. And the administration's position carried no weight with the CBO when it released its analysis of the House Democrats' bill. The CBO, Congress' nonpartisan budget scorekeeper, said Friday that enacting the legislation 'would result in a net increase to the federal budget deficit of $239 billion over the 2010-2019 period.' The increase is mostly because of Democrats' failure to pay for the 'doc fix,' but CBO didn't even bother to entertain the notion that its cost should be excluded." The change has "been a top priority for the American Medical Association, which cited its inclusion as a key reason in its endorsement of the House Democrats' sweeping health care bill" (Werner, 7/21).

NPR interviewed AMA President Dr. James Rohack. The interview did not address MedPAC or the 'doc fix.' Dr. Rohack said the AMA endorsed the House Democrat's bill because "status quo's unacceptable," and the "political process needs to continue on." Asked why the House bill does not address malpractice concerns, Rohack said that "when President Obama spoke to the AMA house of delegates in June, he recognized that defensive medicine was one of the contributors to unnecessary costs. And so we're willing to work with the White House, the Congress to try and come up with some solutions if we're going to provide what we believe is long overdue fundamental health system reform." He also stressed that the House bill was not the final bill. "We believe, like a baseball game, we're in the second inning" (Siegel, 7/21).

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