Congress Repeals Medicare 'Doc Fix' Law, Ending Annual Scramble

Originally published on April 16, 2015 7:40 pm
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Transcript

AUDIE CORNISH, HOST:

For the last 18 years, lawmakers have gone around and around and around trying to fix part of a Medicare law. Ironically, what they were trying to solve was originally supposed to be a fix. That issue - a law from the late 1990s that would cut Medicare payments to doctors to keep the program's budget in check.

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Lawmakers worried that the pay decreases might drive doctors away. So year after year, Congress scrambled to prevent these cuts from kicking in, and they called it the doc fix. This week - an end to the saga.

CORNISH: Congress finally repealed the controversial formula, and President Obama signed the new legislation this afternoon. Joining us now to say goodbye to the doc fix is Julie Rovner of Kaiser Health News. Hey there, Julie, welcome back.

JULIE ROVNER: Thanks, Audie.

CORNISH: Remind us the history here, I mean, this fix was supposed to be a good thing - right? - prevent overspending.

ROVNER: Well, the history is that they changed the way they paid doctors in the late 1980s, but they wanted to make sure that doctors who were going to lose money didn't make it up by just doing more services. So they put in what were called volume controls, so that doctors would take a hit if they did too much. And that didn't quite work, so they reconfigured it in 1997. And as you mentioned, it was supposed to make cuts to the overall budget if they went over the budget. And the problem was they kept going over the budget, and Congress would really postpone the cut rather than cancel it.

So what happened is that over time, the cuts kept getting bigger and bigger and more draconian until they were over 20 percent. And Congress knew that it couldn't cut payments to doctors by more than 20 percent 'cause they'd stop seeing Medicare patients. So it became this consistent headache for Congress doing what we all call kicking the can down the road. So finally, you know, Republicans and Democrats were really sick of this and they got together actually two years ago and came up with this compromise. It's taken really almost two years to get it through and to the president's desk.

CORNISH: So how did it become such a political problem? And what was the kind of big idea that this fight ended up being about?

ROVNER: The political problem was whether or not it should be paid for. Is if you're going to cancel this cut, do you actually have to find offsetting cuts to do it? And I remember back in 2007, Sen. Max Baucus, who was the brand-new chairman of the Finance Committee, suggested at a hearing that they would have to take a mulligan on it, meaning not pay for it. Nobody ever did that until just now when they finally decided that they weren't going to pay for it - at least they weren't going to pay for all of it. And I think that was sort of the key because last year, they had the bill finished, but they couldn't - Republicans and Democrats couldn't agree on a way to pay for it. And in the end, they decided not to pay for all of it.

CORNISH: So politically, who are the victors here? I mean, did lawmakers just kind of give up?

ROVNER: (Laughter) I think politically the victors are lawmakers themselves, particularly on the health committees who are so tired of doing this every year or every six months or every month. And also, you know, the nation's doctors and other health professionals who are paid according to what Medicare pays doctors, who are going to get a new payment system and not have this sort of Damocles of cuts hanging over their heads, and, of course, then the Medicare patients themselves. I should add that this bill also extended for two years. The Children's Health Insurance Program - that was setting up as a potential fight. Democrats wanted to extend it for four years, but the two years was a compromise. This was a real serious Democratic-Republican compromise of the type we don't often see.

CORNISH: Julie, what does this mean for Medicare going forward? I mean, as we mentioned at the outset here, this was supposed to prevent overspending.

ROVNER: That's right. And what it means is that Medicare is going to change on the doctor side. They're going to try and encourage doctors to have alternate payment system that pay them according to outcomes, to how well they do to how healthy they keep their patient. It's not a done deal. There will be a lot of, as usual, Medicare problems with the technicalities of how to do this, but I think everybody agrees it was a step forward that Medicare needed to take.

CORNISH: Julie, is there - I don't know - something on the epitaph of the doc fix grave?

ROVNER: (Laughter) Good riddance.

CORNISH: That's Julie Rovner of Kaiser Health News. She covered the doc fix for many, many years. Transcript provided by NPR, Copyright NPR.