Healthcare

Overhaul of Medicare payments to doctors heads for bipartisan House passage

Medicare bill would start rewarding doctors for performance rather than paying for each procedure

House leaders and national medical groups are working to save a potentially historic deal to overhaul the way Medicare pays doctors and head off a dramatic cut in physicians' fees slated to take effect next week.

The unusual bipartisan legislation was expected to pass the House on Thursday with overwhelming support from Democrats and Republicans.

President Obama also endorsed the compromise. "I've got my pen ready to sign a good, bipartisan bill, which would be really exciting," he said at a White House event Wednesday with national healthcare leaders. "I love when Congress passes bipartisan bills that I can sign."

But with the fee cut looming and Congress set to recess Friday until the middle of next month, the bill's backers were still trying to nail down support in the Senate, though resistance to the deal there seemed to be weakening.

An automatic 21% cut in Medicare fees is scheduled to hit physicians' bills starting April 1 if the Senate doesn't act.

Although the fee cut wouldn't take effect for two weeks while bills were processed, physician groups were growing anxious that the compromise may unravel, hitting doctors' bottom lines and ultimately threatening patients' access to care.

"There is going to be some real pain out there," warned Robert Doherty, senior vice president for the American College of Physicians, which has been working with lawmakers to head off the fee cut.

The compromise — negotiated by House Speaker John A. Boehner (R-Ohio), House Democratic leader Nancy Pelosi (D-San Francisco) and their lieutenants — is designed to do away with the threat of these kinds of Medicare cuts, which have menaced doctors for nearly two decades.

The House bill replaces an arcane fee system established in 1997 that was designed to control Medicare spending by limiting annual increases in physicians' reimbursements.

That system is widely viewed as broken. Year after year, automatic cuts threatened to slash Medicare fees only to be held off at the last minute by Congress, which has repeatedly refused to apply the limits.

For many physicians who depend heavily on Medicare business, this ritual became a growing irritant.

In place of the old limits, the House bill allows fees to increase 0.5% annually over the next four years.

Potentially more important, the bill creates new incentives to move Medicare away from paying doctors for each procedure they perform, a system long decried for encouraging more procedures rather than healthier outcomes.

The federal insurance program for the elderly would increasingly pay physicians based on their performance, rewarding doctors who hit quality targets and whose patients get healthier.

In a tweet this week, Boehner hailed the legislation as "the first real, structural entitlement reform in nearly two decades."

But the new quality incentives in the legislation are modest and fall well short of what many experts believe are necessary to make real differences in the quality and efficiency of patient care that Medicare funds.

Other parts of the compromise package have threatened its passage in the Senate.

House negotiators included a provision that would extend authorization for two years for the Children's Health Insurance Program, or CHIP, a federally funded, state-based health plan that is widely credited with expanding coverage to millions of children from low- and moderate-income families.

But children's advocates and many governors are calling for a four-year CHIP extension. And over the weekend, Senate Finance Committee Democrats warned in a statement that the two-year extension was inadequate.

"This important program provides comprehensive, affordable health coverage for more than 10 million children," the lawmakers noted. "We want to make sure that children and families know Congress considers them a priority by funding CHIP through 2019 rather than in fits and starts."

Powerful interest groups on the left and right have taken aim at other parts of the compromise.

Several conservative groups, including the Club for Growth and the Heritage Foundation, decried the deal for adding to future budget deficits.

Only about a third of the more than $200-billion cost of the legislation is offset by other cuts or new revenue.

Senior citizen advocates, including AARP, are criticizing provisions that would subject some Medicare beneficiaries to higher costs.

The legislation places new, though limited, restrictions on Medigap plans, popular insurance that millions of seniors buy to help pay for out-of-pocket medical expenses not covered by Medicare.

These plans would no longer be able to pay the $147 deductible for physician services, but they would still be able to cover the much higher $1,260 deductible for hospital care.

The House bill also subjects the small number of seniors with individual incomes between $133,500 and $214,000 or joint incomes between $267,000 and $428,000 to higher Medicare Part B premiums. (Those with incomes beyond the upper limits would not see an increase.)

Meanwhile, abortion rights groups raised concerns that the package restricts community health centers from using the funding for abortion services.

Health center leaders note that such limits are not new.

Other important liberal and conservative groups have blessed the deal, including consumer advocate Families USA and anti-tax crusader Grover Norquist.

"Of course, there are many more things we wish were included," Pelosi said this week. "But this is a good deal, and a big step forward on many of our priorities."

So far, Pelosi and Boehner have been able to rally their members behind the package.

Unless the Senate acts by Friday, however, lawmakers probably won't be able to consider the legislation until they return April 13.

Medicare officials can delay the pending 21% fee cut for 10 working days after April 1. But after April 14, physicians would begin to see the smaller Medicare reimbursements.

noam.levey@latimes.com

Twitter: @NoamLevey

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