Congress Debates Medicare Payment Patches

Oct 19, 2009 | Budget Process| Health Care

Update: Debate on this issue got pushed back until today in the Senate. CRFB recently released this press release on the issueDon't Let Doc Fix Add to the Debt: Updates to Physician Payments Must be Paid For.

The Senate opened debate today on a bill that would end mandated cuts in Medicare payments to doctors, an issue that has been gaining traction since the Finance Committee passed health overhaul legislation last week. While the cost of patching Medicare physician payment updates is likely to be around $245 billion over the next decade, the Finance bill does not factor in this cost. Congress has, for years, been blocking cuts in Medicare payments to doctors, which were mandated by the sustainable growth-rate policy in the 1997 Balanced Budget Act. The health care overhaul legislation passed out of Committee only blocks the payment cut for one year, to the tune of $11 billion. And while Congress is very likely to pass payment patches through every year, those potential savings have already been factored into long-term budget projections.

Senate Budget Chairman Kent Conrad has come out strongly in favor of offsetting these costs, as well as those of other popular programs being extended. He said he wouldn’t be able to support a Medicare physician payment fix unless someone figures out how to pick up the $245 billion tab, saying "I'm trying to work out something else, but it's right now on a course to come to the floor. I don't agree with just adding that amount to the debt."

Today the Washington Post ran an editorial, “2.47 Trillion Dimes,” basically supporting Conrad’s position that the Medicare payment formula is one of a number of policies – including AMT patches and extending some of the Bush tax cuts – the costs of which the administration would like to “assume away,” but that eventually someone will have to pay. The Committee for a Responsible Federal Budget urges more Senators, particularly those concerned with our outrageous levels of debt, to come out as Conrad has and pressure the leadership to pay the full cost of extending Medicare physician pay patches. The nation is currently headed off of a fiscal cliff; fully paying for anticipated program costs is the bare minimum of what this Congress and administration should be striving for.