Washington hails end of ‘doc fix’ debacle

As Jan. 1, 2002, approached, Tom Scully, the director of the Bush administration’s Medicare agency, was desperately trying to warn Congress about impending cuts to doctors.

A formula passed five years earlier was aimed at controlling Medicare spending, but this was the first time it was actually eating into doctors’ payments. 

When Congress didn’t act, Scully said, he “came up with every quasi-legal argument” he could find to delay the cuts and kept assuming lawmakers would fix the problem shortly, but they didn’t.

{mosads}That year — when a gallon of gas cost $1.10 and “American Idol” was starting its initial season — was the first that Congress confronted what would soon become an annual headache: the sustainable growth rate (SGR).

Starting the next year, Congress passed a temporary patch to prevent the cuts.

Then it did it 16 more times, through 2014.

That succession of measures passed hurriedly under deadline, triggering millions of dollars worth of healthcare sector lobbying, ended Tuesday night when the Senate sent a bill repealing the SGR to President Obama.

A day later, Washington was still coming to terms with the rare bipartisan deal and the fact that the problem is finally gone. 

Clif Porter, head of government relations for the American Health Care Association, said he was so stunned to be rid “of this perennial sword hanging over” that he did not sleep well Tuesday night.

“I’m a little tired,” he said. “Normally it’s because I’m anxious about SGR, but now it’s like, ‘Did it really happen?’ ”

The AHCA, the skilled nursing trade group, has for years pushed for a long-term fix and tried to fend off cuts to help pay for the short-term patches. 

Congress created the SGR in 1997 as part of a bipartisan balanced budget act. Building on a system that originated under President George H.W. Bush, lawmakers set up automatic cuts to doctors’ payments under Medicare that would kick in if health spending rose above a certain target, tied to economic growth. 

For the first few years, as the economy grew, there were no cuts. But in 2002, the cuts went into effect. After allowing the cuts for a year, Congress settled into its “doc fix” ritual.

The problem had always been how to pay for a long-term solution. Sen. Debbie Stabenow (D-Mich.) sponsored a repeal in 2009 that was defeated on the Senate floor because it wasn’t paid for. Last year, bipartisan committee leaders reached a deal on a payment system to replace the SGR, but could not agree on how to pay for it. 

But this year, Speaker John Boehner (R-Ohio) opened negotiations with House Minority Leader Nancy Pelosi (D-Calif.), and the two were able to agree on a package that paid for about a third of the $214 billion cost.

“We’ve had a patch of this problem 17 times,” Boehner said on the House floor the day the bill passed that chamber last month. “And I decided about a year ago that I had had enough.”

The details of the deal started to become public in mid-March, and just a few weeks later the bill was through the House and Senate. 

“We’re pinching ourselves to make sure it’s real,” said Katie Orrico, Washington director for the American Association of Neurological Surgeons. “The stalemate over how it was going to be paid for seemed insurmountable.”

Rep. Michael Burgess (R-Texas), a doctor, has been working on repealing the SGR since he entered Congress in 2003. 

“Republicans were in the majority, I was a Republican, I thought I’d play a pretty strong role,” he said. 

He soon found out, as a junior member, “I wasn’t even invited to give an opinion or be in the room.”

But he kept “plugging away” and became the lead sponsor of the bill at the core of this year’s package, repealing the SGR and creating a new payment system seeking to incentivize quality.

The package got its final approval in the Senate Tuesday night.

“Along with others, I have worked for many years to put the flawed SGR in the junk bin of history and move to a system that rewards value and more coordinated, high quality care,” Sen. Ron Wyden (D-Ore.) said. “Today —  finally — we have reached that point. We are crossing the victory line and we all are better off.”