Healthcare accounting

For years, Republicans and Democrats have struggled to fix a flawed government payment system for physicians.

The complicated Medicare reimbursement formula has triggered lawsuits, lobbying and overall angst for policymakers in the executive and legislative branches.

{mosads}Unless the system is addressed, physicians would get a 21 percent cut in their Medicare payments in 2010.

But this is not a new problem.

Instead of trashing the payment system years ago, Democrats and Republicans have opted for a piecemeal approach, passing one-year fixes. Why? Because it is cheaper to do it that way.

Democratic leaders on Capitol Hill and the Obama administration are abandoning the Band-Aid approach. They have a strong incentive to do so.

To pass healthcare reform, Democrats need the support of doctors. The American Medical Association (AMA), a leading physician group, has expressed concern about the Democrats’ plans to offer a “public option” in their healthcare reform plan. Regardless, the final bill will have some type of role for the government in the nation’s revamped healthcare system.

But if the Medicare payment system is finally fixed, it will be more difficult for AMA and other physician groups to lobby against healthcare reform legislation.

The Hill’s Jeffrey Young reports that the healthcare reform bill that House Democrats introduced last week would create a new formula to give doctors yearly raises. On its own, Young writes, the permanent fix would add hundreds of billions of dollars of new spending to the bill, which is expected to exceed $1 trillion.

But House Democrats are considering budgetary maneuvers that would erase the price tag of the Medicare physician payment increases from the Congressional Budget Office (CBO) score of the reform bill, even though the new money will still come out of federal coffers and increase the budget deficit.

Rep. Pete Stark (D-Calif.), who chairs the Ways and Means Health subcommittee, has said the cost of the permanent payment fix would be $285 billion.

A spokeswoman for House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) insisted that if Congress took this route, it would still pay for a healthcare bill under CBO’s rules.

Since Congress addresses the physician formula on an annual basis, Democrats claim that it is not fair to have its costs attached to healthcare reform efforts.

Fair enough.

But Democrats should avoid budget gimmicks to pay for their healthcare reform provisions. They claim that their legislation will not add to the federal deficit over 10 years. It’s a noble goal, though we believe it is politically impossible to pass a bill that covers most of the nation’s uninsured while offsetting its price tag of more than $1 trillion in new benefits.

Democrats have not yet shown how they will pay for their healthcare reform bills. If they use sleight of hand, they will attract criticism.