In order to keep the official price tag on the final Obamacare bill under $1 trillion, the U.S. Congress omitted a ‘permanent’ fix in Medicare physician payments from the bill. That fiscal fix is necessary to prevent an automatic 23 percent cut in Medicare physicians payments. The cost of the fix is $250 billion.
In order to avoid opposition to the bill from the American Medical Association, the Democratic-majorities in both Houses promised to pass a separate bill that would provide this permanent fix. Because of election considerations, they failed to do so. As a result, the lame-duck Congress is playing games designed to thrust the fiscal responsnibility onto the incoming Republican-majority House of Representatives.
Last week, the lame-duck Senate voted to postpone the automatic 23 percent pay-cut – but just for four weeks – at a cost of $1 billion, to be paid for by reducing certain outpatient therapy payments by $100 million per annum over the next 10 years. The lame-duck House plans to approve the same deal within the coming several days. In the New Year, a new Congress will confront the responsibility for irresponsible health care reform legislation. The President is completely silent on this important issue.
If Medicare physician payments are cut by 23 percent, there will be a major exodus of physicians from that system. This would be unconscionable at such short notice. So the Republican House confronts a serious problem. The real solution is to engage in removing the Medicare price-control model and reforming the system, in part by raising the age limit for access, in part by means-testing some benefits, in part by allowing eligible individuals to pay extra for preferred services, and in part by changes in the tax code. This should have been dealt with as part of the health care reform debate. For political reasons, the Democrats rushed a bad bill into law. A new Congress now has to deal with the largely intended consequences of such overtly political behavior.