2-year Medicare pay patch passes House but hits roadblock

Washington -- The House has approved legislation that delays Medicare physician payment cuts until 2014, while providing 1% pay raises in 2012 and 2013.

However, Senate Democratic leaders and the White House rejected the House measure based on several other provisions in the GOP bill, which was passed by a largely party-line vote of 234-193 on Dec. 13. The comprehensive legislative package would extend payroll tax cuts, reform unemployment insurance and permit the construction of a controversial oil pipeline stretching from Canada to Texas. President Obama said that if the House bill were to pass, he would veto it over the pipeline provisions and several budgetary offsets that Republicans use to pay for the new spending in the bill.

"Instead of working together to find a balanced approach that will actually pass both houses of the Congress, [the House bill] instead represents a choice to refight old political battles over health care and introduce ideological issues into what should be a simple debate about cutting taxes for the middle class," the White House said in a statement.

Senate Majority Leader Harry Reid (D, Nev.) on Dec. 14 called the House bill a partisan charade. Reid suggested putting the measure to a quick vote, so it could be defeated, and then move on to other must-pass items, including funding the federal government to avoid a shutdown after Dec. 16. Legislation typically needs 60 votes in the Senate to avoid the threat of a filibuster by the opposing party.

The Medicare provisions in the House bill would delay the 27.4% cut scheduled for Medicare doctor pay in 2012 under the sustainable growth rate formula. Instead, the measure would increase rates by 1% in 2012 and by another 1% in 2013 before scheduled pay cuts returned in 2014. Supporters of the bill said the two-year pay patch would give lawmakers time to craft a long-term solution to the SGR.

"Among the many important provisions within this legislation is a halt to the looming cuts in the Medicare reimbursement rates for physicians," said Rep. Tom Price, MD (R, Ga.). "It would be devastating for America's seniors were these deep cuts to go into effect and further limit the number of physicians able to treat Medicare beneficiaries."

Prior to the House vote, American Medical Association President Peter W. Carmel, MD, said the legislation acknowledged the devastating impact the 27.4% cut would have on patient access to care, and he renewed the AMA's call for a more permanent solution.

"The sustainable growth rate formula has been plaguing Medicare for over a decade and permanent repeal is long overdue," Dr. Carmel said. "The AMA again questions why Congress continues to spend increasing amounts of taxpayer money to preserve a policy that everyone knows is fatally flawed."

But although Democrats have said they also support preventing deep physician pay cuts, they object to the way Republicans have proposed to pay for the patches. The House GOP bill would offset the temporary pay changes by charging higher premiums to more higher-income seniors, lowering projected spending by $31 billion over 10 years. The legislation would impose more restrictions on health insurance subsidies that would be offered through exchanges under the health system reform law, and it would rescind $8 billion from a prevention fund created by the reform law.