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Bipartisan Medicare bill would end yearly fixes

Boehner, Pelosi back plan to set doctor fees

Representative Nancy Pelosi and Speaker John Boehner unveiled a proposal to stop lawmakers from using the threat of deep cuts to physician payments as a political bargaining chip. Associated Press

WASHINGTON — At least once a year, doctors and their elderly patients endure a hated ritual where lawmakers use the threat of deep cuts to physician payments as a political bargaining chip. Now, in a rare instance of bipartisan cooperation, House leaders aim to stop the practice, once and for all.

Speaker John Boehner and Representative Nancy Pelosi, the chamber’s minority leader, on Thursday unveiled a proposal for a permanent solution, renewing hope for health care providers but leaving lawmakers in both parties fretting over the means to pay for the $200 billion package.

If the bipartisan deal is not sealed by April 1, the pending cuts would cost Massachusetts providers $300 million, affecting close to 20,000 doctors and 1.1 million Medicare patients in the state. Doctors warn that payment cuts would force them to stop treating people with Medicare coverage; advocates for seniors say their premiums would rise.


The deal would end the political “Groundhog Day’’-type routine Congress undergoes each year to override an antiquated formula that pegs physician payments to economic growth. The current system, replayed 17 times over the years, holds doctors and many seniors hostage until lawmakers settle on a temporary fix.

“It’s just nuts and they need to fix it,” said Dr. Richard Pieters, president of the Massachusetts Medical Society, a physician advocacy organization that has made regular pilgrimages to Washington in an effort to replace these so-called “doc fix” patches with a permanent solution. “This is critical to the viability of physician practices, which are a significant part of the economy in Massachusetts.”

Lawmakers are still negotiating a payment plan, but the bipartisan bill would eliminate the outdated formula. Providers would instead receive a 0.5 percent annual increase for five years. The bill also encourages physicians to shift from a system that pays them for the services they provide toward one hinging on patient outcome.


The legislation is nearly identical to bills introduced last year in the House and Senate; those fell apart when lawmakers couldn’t figure out how to pay for the plan. This time, Boehner and Pelosi are pushing a deal from the start.

Neither party likes the formula, which was created by a 1997 law aimed at deficit reduction. Medical costs have risen faster than expected, and doctors say the formula’s low fees would hamper them from caring for Medicare patients. Congress has spent nearly $150 billion on short-term patches.

But a permanent fix, and how to pay for it, has eluded lawmakers.

A potential part of the deal — not addressed in the legislation unveiled Thursday — would leave taxpayers to cover about $140 billion over the first decade, an issue that does not sit well with some fiscal conservatives. About half of the remaining $60 billion would come from cuts to hospitals and health care providers. The other half would be raised by new costs to Medicare beneficiaries, including those with higher incomes. Seniors making more than $133,000 or couples making more than $266,000 could see their premiums rise.

The Medicare adjustments have some liberals worried.

“We need to get to a fix, but the question is going to be: On the backs of whom?” said Representative Joseph P. Kennedy III, a Brookline Democrat and member of the House Energy and Commerce Committee, which introduced the bill along with the Ways and Means Committee and the Senate Finance Committee. He said he wanted to see the details before making a decision to back it.


Senior citizen groups already are sounding alarms.

“We realize that the [current system] is a broken formula and needs to be addressed in some way,” said David Lipschutz, senior policy attorney at the Center for Medicare Advocacy, a Connecticut-based organization, but “we would be concerned if cost-shifting proposals were used to achieve that.”

Conservatives, wary of anything that boosts the deficit, are split on the proposal. “What’s not good is right now, it’s not paid for,” said Representative Joe Barton, a Texas Republican.

Heritage Action for America, a conservative advocacy group, has emphasized that it will not support a bill that fails to offset all costs.

“We are fans of permanently repealing’’ the current formula, said spokesman Dan Holler . “And doing it right in our eyes means paying for it fully.”

But others are eager for entitlement reforms they would get from the deal, and view the current formula as a prime example of Washington ineptitude.

“Maybe we are just going to have to bite the bullet and go forward,” said Representative Matt Salmon, an Arizona Republican.

The Senate has its own concerns. The House leaders’ bill also would extend funding for a low-cost children’s health insurance program for two years. Otherwise, it’s set to expire in September. Some senators want it extended for four years.

The bill is expected to reach the House floor next week, leaving just days to get it through both chambers ahead of a spring break. Congress technically has through March 31 to revise the formula.


Advocates hope exasperation over the annual patches will motivate lawmakers. They also say the plan would increase savings in the long run.

“In an ideal world we would pay for all of it,” said Douglas Holtz-Eakin, president of the American Action Forum, a center-right policy institute. “But that’s not a deal you can get through the House, Senate, and have the president sign. This does include structural reforms to Medicare . . . and I think this is good.”

Representative Phillip Roe, a Tennessee Republican, stood outside the House floor on Wednesday and described the formula’s flaws by drawing graphs on a piece of paper.

Down the hall, House Ways and Means Committee ranking member Sander Levin, a Michigan Democrat, was also grumbling about it. “At some point you patch something and you pay for patch after patch,” he said. “That has not been a fiscally sound way to do it.”

Levin sounded optimistic about better progress this time.

“That’s assuming there isn’t a fly in the ointment,” he said. “Around here, you never know.”

Jessica Meyers can be reached at jessica.meyers@globe.com. Follow her on Twitter @jessicameyers.