FAQ: The House Passes A Bill To Fix Medicare’s Doctor Payments. What’s In It?

"The SGR has generated repeated crises for nearly two decades," Energy and Commerce Committee Chairman Fred Upton, R-Mich., one of the bill's drafters, said in a statement. "We have a historic opportunity to finally move to a system that promotes quality over quantity and begins the important work of addressing Medicare's structural issues."

The package, which House Speaker John Boehner, R-Ohio, and Minority Leader Nancy Pelosi, D-Calif., began negotiating weeks ago, also includes an additional $7.2 billion for community health centers over the next two years. NARAL Pro-Choice America and Planned Parenthood denounced the deal because the health center funding would be subject to the Hyde Amendment, a common legislative provision that says federal money can be used for abortions only when a pregnancy is the result of rape, incest or to save the life of the mother.

In a letter to Democratic colleagues, Pelosi said the funding would occur "under the same terms that Members have previously supported and voted on almost every year since 1979." In a statement, the National Association of Community Health Centers said the proposal "represents no change in current policy for Health Centers, and would not change anything about how Health Centers operate today."

A summary of the House plan says the package also includes other health measures – known as extenders – that Congress has renewed each year during the SGR debate. The list includes funding for therapy services, ambulance services and rural hospitals, as well as continuing a program that allows low-income people to keep their Medicaid coverage as they transition into employment and earn more money. The deal also would permanently extend the Qualifying Individual, or QI program, which helps low-income seniors pay their Medicare premiums.

Q. What is the plan for CHIP?

The House plan would add two years of funding for CHIP, a federal-state program that provides insurance for low-income children whose families earned too much money to qualify for Medicaid. While the health law continues CHIP authorization through 2019, funding for the program has not been extended beyond the end of September.

The length of the proposed extension could cause strains with Senate Democrats beyond those on the Finance panel who have raised objections to the House package. Last month, the Senate Democratic caucus signed on to legislation from Sen. Sherrod Brown, D-Ohio, calling for a four-year extension of the current CHIP program.

Q: How would Congress pay for all of that?

The measure the House passed does not. That is a major departure from the GOP’s mantra that all legislation must be financed. Tired of the yearly SGR battle, veteran members in both chambers may be willing to repeal the SGR on the basis that it’s a budget gimmick – the cuts are never made – and therefore financing is unnecessary. But that strategy could run into stiff opposition from Republican lawmakers and some Democrats.

Most lawmakers feel the need to find financing for the Medicare extenders, the CHIP extension and any increase in physician payments over the current pay schedule. Those items account for about $70 billion of financing in the approximately $200 billion package.

Conservative groups are urging Republicans to fully finance any SGR repeal. "Americans didn’t hand Republicans a historic House majority to engage in more deficit spending and budget gimmickry," Dan Holler, communications director for Heritage Action for America, said earlier this month.

Q. Will seniors and Medicare providers have to help pay for the plan?

Starting in 2018, wealthier Medicare beneficiaries (individuals with incomes between $133,500 to $214,000, with thresholds likely higher for couples) would pay more for their Medicare coverage, a provision impacting just 2 percent of beneficiaries, according to the summary.

Starting in 2020, "first-dollar" supplemental Medicare insurance known as Medigap would not be able to cover the Part B deductible for new beneficiaries, which is currently$147 per year but has increased in past years.

But the effect of that change may be mitigated, according to one analysis.

"Because Medigap policies would no longer pay the Part B deductible, Medigap premiums for the affected policies would go down. Most affected beneficiaries would come out ahead — the drop in their Medigap premiums would exceed the increase in their cost sharing for health services," according to an analysis from the Center on Budget and Policy Priorities, a left-leaning think tank. "Some others would come out behind. In both cases, the effect would be small — generally no more than $100 a year."

Experts contend that the 'first-dollar' plans, which cover nearly all deductibles and co-payments, keep beneficiaries from being judicious when making medical decisions. According to lobbyists and aides, an earlier version of the 'doc fix' legislation that negotiators considered would have prohibited 'first dollar' plans from covering the first $250 in costs for new beneficiaries.

Post-acute providers, such as long-term care and inpatient rehabilitation hospitals, skilled nursing facilities and home health and hospice organizations, would help finance the repeal, receiving base pay increases of 1 percent in 2018, about half of what was previously expected.

Other changes include phasing in a one-time 3.2 percentage-point boost in the base payment rate for hospitals currently scheduled to take effect in fiscal 2018. The number of years of the phase-in isn't specified in the bill summary.

Scheduled reductions in Medicaid 'disproportionate share' payments to hospitals that care for large numbers of people who are uninsured or covered by Medicaid would be delayed by one year to fiscal 2018 but extended for an additional year to fiscal 2025.

Q. How quickly could the Senate act?

Despite the wide margin of passage in the House, plus the Obama administration's support of the measure, senators decided to postpone its consideration until they return to Capitol Hill on April 13. Senate Democrats and Republicans may want to offer amendments to the House bill.

Until Congress takes final action, the Centers for Medicare & Medicaid Services, which oversees Medicare, will likely hold the Medicare physician payment claims in order to avoid physicians seeing their payments cut 21 percent. CMS has indicated that these electronic claims can be held for two weeks and paper claims for 29 days.

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FAQ: The House Passes A Bill To Fix Medicare’s Doctor Payments. What’s In It?

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