Senate Negotiates $19 Billion ‘Doc Fix’

Senate Negotiates $19 Billion ‘Doc Fix’

Printer-friendly version
a a
Type Size: Small

Senate negotiators have reached a bipartisan agreement to extend physician pay at current levels for another year. It will be paid for with $19.2 billion clawed back from subsidies for individuals who buy insurance under health care reform, sources on Capitol Hill, who wished to remain anonymous because of the sensitivity of the discussions, said late Monday.

A vote on the package could come as early as Wednesday. Top staff representing Senate Majority Leader Harry Reid, D-Nev., Minority Leader Mitch McConnell, R-Ky., Senate Finance Committee chairman Max Baucus, D-Mont., and ranking member Charles Grassley, R-Iowa., were involved in the daylong negotiations.

If passed in both Houses and signed by President Obama, the legislation would mark the first change in the Democratic Party’s signature health care reform law. The move would have symbolic significance that far outweighs the legislation’s $19 billion price tag.

The so-called “doc fix” is an annual adjustment to Medicare physician reimbursement rates that negates budget cuts that were supposed to go into effect starting in 2002. Each year, Congress overrules those cuts, which were based on projected increases in productivity that were never achieved.

In July, Congress granted physicians a 2.2 percent increase as part of a mid-year “doc fix,” and last month, it postponed implementing the cuts until the end of the year. If Congress doesn’t act by January 1, physician pay from Medicare will decline by an estimated 22 percent.

About $14 to $15 billion of the $19 billion in the packages goes to freezing physician pay at current levels. The rest has been earmarked for physical therapy programs for the elderly, special payments for rural areas, several other programs that must be extended every year.

To pay for these extensions and higher physician pay, some moderate-income families who buy insurance through the exchanges that will be set up under the reform law will have to pay more. Under the law that was passed last July, individuals and families will receive subsidies starting in 2015 to buy individual plans if they earn less than 400 percent of the federal poverty level. The subsidy was based on the previous year’s income.

Under the new plan, the government will be able to reclaim that subsidy if they go over that income during the year.

Click here to visit the GoozNews home page.

spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.