Lawmakers unveil bill to prevent Medicare cuts to doctors

By Peter Sullivan and Mike Lillis - 03-19-15 12:41 PM EDT

Bipartisan committee leaders in the House and Senate introduced legislation Thursday to permanently end automatic cuts to doctors under Medicare.

The language released Thursday is the policy section but does not deal with how to pay for the legislation—which House leaders are still working out. That broader package, which is expected to include a two-year extension of the Children's Health Insurance Program, will be released in the coming days.

The overall package is expected to cost $210 billion with only $70 billion offset — a hole that would pose the highest hurdle to passing the legislation.

“Obviously the pay-fors are important,” said Rep. Michael Burgess (R-Texas), one of the main sponsors of the legislation.  “We still have more work to do.” 

Without congressional action, doctors will see a 21 percent cut to their Medicare payments on April 1, under an 18-year-old formula known as the Sustainable Growth Rate, or SGR.

The emerging deal would permanently repeal that formula, eliminating a perennial headache for Congress, which has stepped in 17 times to prevent those cuts with temporary patches. 

House Speaker John Boehner (R-Ohio) acknowledged Thursday that the package, which he's been negotiating with House Minority Leader Nancy Pelosi (D-Calif.) since January, still has a ways to go in terms of the offset issue.

“I'm not going to say we've got it all resolved yet, but I'm optimistic that we will,” Boehner said.

He noted that it was a controversy surrounding offsets that sunk a similar package last year.

“The agreement then was that the leadership would look to find appropriate offsets,” Boehner said. “In my conversations with my Democrat counterparts in early, mid-January, we began to discuss some of these structural reforms that have been on everyone's list for some time.

“There was an opportunity that presented itself to work in a bipartisan way to find the appropriate offsets,” he added. “And the door opened and I decided to walk into it.”

The language released Thursday is similar to the proposal last year. It would provide 0.5 percent payment increases for five years while transitioning to a new system aimed at incentivizing doctors to provide quality over quantity in care. 

It requires participants to receive at least 25 percent of their revenue through these so-called Alternative Payment Models by 2019-2020, with the threshold increasing over time.   

As for the larger package still being negotiated, about $70 billion of the roughly $210 billion package is expected to be paid for, though proponents argue there are even greater savings over time. The $70 billion in offsets are expected to be split between provider cuts and beneficiary cuts, such as making wealthier seniors pay a higher percentage of premium costs.

Some Democrats have been wary of the package because of the expected means-testing provision. They fear it could lead to an erosion of benefits for everyone.

Pelosi on Thursday acknowledged some of the concerns – “When it is finished, people will see what it is and then we'll see who wants to vote for it or not,” she said – but suggested most Democrats are ready to support the package.

“Our caucus is very enthusiastic about ending this whole discussion [and] the uncertainty about the SGR that has existed for years. For a long time, our caucus has been ready to take the action that we're taking now,” she said.

“It's something that has to happen.”

This story was updated at 2:09 p.m.