Clock Is Ticking for ‘Doc Fix,’ Medicare ‘Extenders’

Jackie Judd and KHN’s Mary Agnes Carey discuss the prospects for an agreement this month on Medicare reimbursement rates, and what happens if nothing is done before the end of the year.

Listen to the interview.

JACKIE JUDD:  Good day, this is Health On The Hill.  I’m Jackie Judd.

This is a pivotal week on Capitol Hill as Congress deals with the near-annual “doc fix” dilemma.  Payment rates will be slashed by about 27 percent, come the first of the year, unless lawmakers come to an agreement on maintaining current reimbursement levels.  A discussion of that and more with KHN correspondent Mary Agnes Carey.  Welcome, Mary Agnes.

MARY AGNES CAREY:  Thank you.

JACKIE JUDD:  How far apart is each party, and what is the approach of the Democrats and the Republicans?

MARY AGNES CAREY:   There seems to be bicameral, bipartisan agreement to do something on the doc fix.  As you note, there are differences in approaches.  House Republicans have been floating a two-year payment fix – we might hear more about that officially later today.  We haven’t heard yet from the Senate Democrats what they want to do. 

But some of those pay-fors for the House Republican fix may not find favor with Democrats.  For example, they may return to the issue of asking higher-income beneficiaries in Medicare to pay more for those benefits.  We already have income-relating in Parts B and D.  Many Democrats don’t want to go further beyond those levels.  House Republicans might want to do that.  They may also want to take some funding for the implementation of the health law away, and, of course, Democrats will oppose that.

So, Senate Democrats may be releasing something – I am expecting possibly this week or later.   They may go for a 12-month fix.  They may go for an 18-month fix.  They also may be biding their time, waiting and seeing what will the House accept before they move forward.

JACKIE JUDD:  And as you suggest, the rub here is that needs to be budget-neutral. 

MARY AGNES CAREY:  Exactly.

JACKIE JUDD:  And it’s $22 billion for one year, $38 billion for two.  Not insignificant sums. 

MARY AGNES CAREY:  Not insignificant sums, but the fact that there appears at least now to be interest in moving forward, that may help get some bipartisan agreement on the pay-fors, as well.

JACKIE JUDD:  If they don’t reach an agreement by the end of the year, there is some precedent here for how to manage the problem, presuming that at some point in the new year, the doc fix is remedied.

MARY AGNES CAREY:  They have done retroactive fixes before.  The Centers for Medicare and Medicaid Services has provided guidance to physicians saying, ‘Hey, hold your bills before you submit them – Congress is very close to making a fix.’  That kind of solution, as you can imagine, is not too popular with physicians.  It creates paperwork headaches.  It creates instability for them.  They would much prefer to get it done before it expires at the end of the year.

JACKIE JUDD:  Congress also has some other business related to Medicare.  Programs, relatively small programs, they’re called Medicare extenders, principally, they impact rural hospitals, what is the status of that?

MARY AGNES CAREY: Again, there seems to be bipartisan interest in moving these forward, as you note, they have a lot of support from rural lawmakers. Some of the extenders have additional funding for ambulances in these areas, or reclassification for hospital wages. So hospitals in those areas can give higher wages to their employees. These things are routinely moved [passed] at the end of the year, that’s what everyone expects now. The question is, where do they hitch a ride? Do they go on the doc fix? Do they go on another must-pass, perhaps a comprehensive, omnibus spending bill? That route isn’t clear yet.

JACKIE JUDD: And you mention that this happens every year. Is it a more difficult task this year because of the economy, because of the great debates that they’re having on Capitol Hill about spending levels?

MARY AGNES CAREY: I think you pointed to it exactly. There is such disagreement about spending, what the government should be spending, what they should not be spending. Everyone wants to reduce the deficit and the debt; they can’t agree how to get there. It seems to have slowed down everything this year.

JACKIE JUDD: And a final question: Marilyn Tavenner has been nominated by the president to run CMS replacing Don Berwick. There have been some early positive comments from Republicans. So what should we expect? Confirmation any time soon, or at least a vote?

MARY AGNES CAREY: As you noted, some Republicans have stepped forward to praise her. House Majority Leader Eric Cantor, who is a Republican from Virginia, has called her eminently qualified for the post. Orrin Hatch, who’s a Republican senator from Utah, he’s the ranking Republican on the Finance Committee where she would get a hearing, has said he’s heard good things about her, but he also made it clear that he wants to review her paperwork very carefully.

Some other Senate Republicans have offered a list of questions they would have for Marilyn Tavenner, and they focus on what they view are the weaknesses in the health care law: the Medicaid expansion, whether or not employers would dump workers from coverage, does the health care law really want to save money? So this would be gearing up for quite an extensive evaluation of her for this post. She’s been named acting administrator now, and so the administration may simply decide that during an election year they don’t want to pursue this fight. She’s been named acting, she’s been acting before, and they may just simply decide to keep it there.

JACKIE JUDD: OK, we will see. Thank you so much, Mary Agnes Carey of Kaiser Health News. I’m Jackie Judd.

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