The House passed a bill permanently doing away with Medicare’s flawed payment formula, after years of correcting it with temporary fixes.
The measure easily passed the House 392-37 on Thursday. It now moves to the Senate, where lawmakers still face some divisions.
The flawed formula will lead to deep payment cuts for Medicare doctors starting April 1, but the government will be able to postpone the cuts for a few weeks, giving the Senate more time to reach consensus.
The formula, known as the Sustainable Growth Rate, or, SGR, has frustrated lawmakers and health care advocates for more than a decade. Everyone agrees that steep Medicare payment cuts would cause many doctors to stop accepting seniors as patients. The vote Thursday represents a big step toward finally ditching the formula.
“Today is the last time I’ll have to talk about the broken SGR,” said Democratic Rep. Frank Pallone, ranking member of the House Energy and Commerce Committee.
“Don’t look now, but we’re actually governing,” said Rep. Renee Ellmers, R-N.C.
Over the last few weeks, disputes including how to pay for the measure threatened to derail it, but Republican and Democratic leaders allied in urging support among their members. Still, a number of conservatives were irked that just one-third of the bill is offset and 33 Republicans voted against the measure. Democrats wanted it to include longer funding extensions for other health programs, but just four opposed it in the end.
For more than a decade the formula would have led to steep payment cuts for Medicare doctors if Congress had not enacted an annual patch known as the “doc fix.” Lawmakers have long wanted to permanently replace it but were always divided on how to do it and how to pay for it.
“Today we put a stop to that gravy train,” said Energy and Commerce Chairman Fred Upton, R-Mich.
Last year, top House and Senate committees released a bipartisan plan to replace the formula with a Medicare payment system that bases more payments on the quality of service doctors provide, rather than the quantity. It increases doctor payments by 0.5 percent for the first five years and after that allows doctors to receive extra payments by opting into the new merit-based system.
At the time, its only serious obstacle to passage was that Democrats and Republicans couldn’t agree on how to pay for it — or even whether they needed to at all. It wasn’t until leadership started pushing it hard that the bill gained traction.
“I decided about a year ago I’d had enough of it,” House Speaker John Boehner said Thursday.
One-third of the roughly $210 billion bill is paid for mainly by requiring wealthier seniors to pay more for Medicare and through cuts to hospitals. It would increase the deficit by $141 billion over a decade, the Congressional Budget Office says.
The measure also includes two-year funding extensions for the Children’s Health Insurance Program and for community health centers that serve low-income residents. Democrats wanted longer funding extensions, and some in the Senate are pushing hard for that change.
But President Obama potentially raised the chances Senate Democrats will reach a compromise with Republicans by saying Wednesday he will sign it should Congress come to an agreement.
“It would reform the flawed Medicare physician payment system to incentivize quality and value … would make reforms that could help slow health care cost growth, and would extend other important programs such as health care coverage for children,” the White House said Wednesday.
