Leaders increasingly optimistic they’ll strike Medicare deal

Drawing ever-closer to a bipartisan deal, top congressional leaders are increasingly optimistic Congress will pass a long-term fix to the perennial problem surrounding Medicare payments to doctors.

“I’m not going to say we’ve got it all resolved yet, but I’m optimistic that we will,” House Speaker John Boehner (R-Ohio) said Thursday.

Committee leaders in both the House and Senate introduced legislation Thursday to end automatic cuts to doctors under Medicare, though the proposal does not include provisions offsetting the substantial costs. Those much more controversial details are still being worked out by top leaders.

The broader package, which is expected to include a two-year extension of the Children’s Health Insurance Program, could 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.”

The months-long negotiations have been marked by grumbling on both sides of the aisle. Conservative fiscal hawks are wary that the deal will saddle the Treasury with substantial new deficit burdens, while liberal Democrats are vowing to oppose any measure that cuts Medicare benefits to seniors.

Still, congressional leaders are all but predicting the final product will win enough support from both parties to move this year.

“For a long time, our caucus has been ready to take the action that we’re taking now,” House Minority Leader Nancy Pelosi (D-Calif.), who’s in negotiations with Boehner on the package, said Thursday.

“It’s something that has to happen.”

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 repeal that formula, eliminating a perennial headache for Congress, which has stepped in 17 times to block SGR-derived cuts with temporary pay patches.

Boehner acknowledged Thursday that it was a controversy surrounding offsets that sunk a similar package last year. But he suggested the talks have come further in the new Congress.

“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 last year’s proposal. It would increase Medicare physician payments by 0.5 percent annually 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 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 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,” she said. “When it is finished, people will see what it is and then we’ll see who wants to vote for it or not.”

Pelosi also said the package will include “some other priorities that are going to expire soon” – provisions the negotiators “wanted to be in advance of.”

She did not provide any details.