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Medicare Providers Want Permanent “Doc Fix”

Members of Texas' congressional delegation say they got closer than ever this year to fixing a federal Medicare formula that leaves doctors threatened with payment cuts annually.

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Advocates for Texas doctors are renewing their calls for reform of a federal Medicare formula that leaves providers threatened with steep cuts to their payments year after year. This week, Congress was again unable to reach an agreement on how to finance a permanent fix for the federal insurer of the elderly, enacting another temporary patch.

Members of the state's congressional delegation said that despite Monday's "doc fix" bill, they remain hopeful they will reach a bipartisan agreement to repeal the “sustainable growth rate” formula used to set Medicare payments to physicians, with which health care providers have long taken issue.

U.S. Rep. Michael Burgess, R-Lewisville, who introduced a bill to repeal the formula, said he was encouraged by the support his measure received from the three committees that have jurisdiction over the matter and members from both parties.

“I have received some assurances that the work on this will continue,” Burgess said. “The broad bicameral, bipartisan agreement that was already in place two weeks ago is quite operational and still ready to go. Even though we have a patch in place ... there’s no reason we can’t continue to work just because it’s not up against a deadline.”

Back at home, the temporary fix has left Texas Medicare providers with another year of worry. They want a permanent resolution to avoid “draconian cuts” that could lead to the closure of medical practices, said Dr. Stephen Brotherton, president of the Texas Medical Association. Doctors also argue that such cuts would send doctors fleeing from Medicare, leaving fewer physicians to serve the state's elderly patients. In Texas, only 58 percent of doctors currently take new Medicare patients, Brotherton said.

The TMA, which represents 47,000 physicians and medical students in Texas, reluctantly supported the temporary fix up for a vote this week after it became clear the formula would not be permanently reformed. But Brotherton said doctors are demanding a permanent resolution, and have suffered for too long with looming cuts.  

“We don’t have an ability to not see Medicare [payments] while this thing is being worked on,” Brotherton said, citing previous deadlines Congress missed that led to delayed Medicare payments until a fix was enacted.

The Medicare formula has been a recurring point of discord among health care providers since it was first established in 1997. Under the formula, if Medicare spending exceeds a targeted level, physician payment rates are to be reduced in subsequent years to recapture costs. Congress followed that rule at first, instituting a 4.8 percent Medicare payment cut in 2002. Since then, however, it has used a patch to defer further cuts 17 times. This has allowed spending debt to accumulate, increasing the amount of funding needed to fix the problem each time.

With a price tag of about $140 billion over 10 years, Congress was split on how to finance the long-term fix, though it seemed to come closer than previous attempts. In the end, congressional leaders agreed on the temporary fix ahead of the previous patch's Monday night expiration. 

The temporary measure includes about $21 billion in funding for Medicare payments to physicians and several other health care provisions to be financed through cuts to health care providers, including hospitals that treat a “disproportionate share” of uninsured and Medicaid patients.

While the cuts to hospitals will be delayed for a year, it’s an additional burden for facilities that argue they are already facing cuts under the Affordable Care Act and state funding formulas. 

“It’s problematic to go through this fire drill every nine or 12 months, because we end up being targeted as one of the pay-fors,” said John Hawkins, senior vice president of government relations for the Texas Hospital Association. “A fix would’ve been much better for us.”

Whatever the permanent solution is will come down to how the Medicare payment reform is financed.

“When it came to a pay-for, that’s where the breakdown occurred. The fix was bipartisan; the pay-for was not,” said U.S. Rep. Henry Cuellar, D-Laredo, who has been a vocal supporter of repealing the current formula. Cuellar said he sees unprecedented support for the long-term fix, though he is worried that the temporary fix will take away from the bill’s momentum. 

For now, advocates in Texas aren’t holding their breath.

“I’d have a lot better time predicting an NCAA bracket than predicting what Congress is going to do, particularly when you get down to time,” the TMA's Brotherton said. 

Disclosure: The Texas Hospital Association and the Texas Medical Association are corporate sponsors of The Texas Tribune. (You can also review the full list of Tribune donors and sponsors below $1,000.) 

This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente. 

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