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Doc Fix 101: The options on the table

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TOBY MELVILLE REUTERS House Republicans on Friday unveiled their year-end, payroll tax plan. It’s also among the first legislative attempts this year at tackling the “doc-fix--” a looming 27.4 percent cut to doctors’ Medicare reimbursements that will take effect unless Congress greenlights additional funding.

Any legislation to fix the doc-fix aims to do the same thing: prevent a massive pay cut to doctors. But they vary on two important dimensions: the duration of the fix and how it’s financed. Here’s a run down of the proposals on the table, how they differ and how they compare to what’s worked in the past:

The last Doc-Fix (Passed December 9, 2010)

Timeline: Just about a year ago, Congress passed a bill that put an additional $14.9 billion toward Medicare reimbursements. That was enough to avert any pay cut for one year, bringing us to where we are now.

Pay-for: Congress found $14.9 billion by tweaking formulas for the health insurance subsides that become available through the Affordable Care Act. The law assumes every year, some people will misreport their income, potentially earning more than they expect. Under the health reform law, if a person gets a larger tax subsidy than they’re eligible for, they have to repay no more than $250 of it. The new doc-fix essentially raised that cap, requiring individuals to pay back a larger chunk of any overpayment.

Republicans’ proposal (proposed Dec. 9)

Timeline: The Republicans want to shore up doctor payments for two-years, and also give physicians a 1 percent raise. That, according to CBO estimates, will cost $39 billion.

Pay-for: Since this doc-fix is part of a larger bill that also extends the payroll tax cut, Republicans don’t break out what exactly would finance the fix. But in this summary of the overall bill’s financing, they do target a number of health care programs. Again, they want to raise the amount of tax subsidies that individuals would have to repay. They would also cut $8 billion from the reform law’s Prevention Fund and increase Medicare premiums for higher income seniors, netting another $31 billion.

Rep. Allyson Schwartz’ proposal (proposed Nov. 16)

Timeline: In the midst of supercommittee deliberations, Rep. Allyson Schwartz (D-Pa.) introduced The Medicare Physician Payment Innovation Act, legislation that takes on the doc-fix in a pretty unique way. She would freeze all doctors’ pay in 2012, followed by a slight increase from 2013 through 2016. At the same time, her proposal would direct HHS to come up with four new payment models that doctors could begin to chose from starting in 2018. Doctors who do not move onto one of the new payment models, and stay on traditional fee-for-service Medicare, would see their payments gradually reduced.

Payfors: Schwartz’s legislation does not come with a financing method and, without CBO scoring, it’s difficult to estimate how much it would cost.

The MedPac proposal (proposed Oct. 14)

Timeline: The Medicare Payment Advisory Commission, or MedPac, is a government agency that advises Congress on Medicare issues. And its come up with its own solution. It proposes repealing the current formula for determining how much doctors get paid - the one that always creates a shortfall - and legislating new payment rates through the next 10 years.

Payfors: The MedPac proposal does do some legwork on costs by recommending that specialists’ salaries be reduced by 5.9 percent. But at the end of the day, it’s not paid for and comes with a $200 billion pricetag over the next 10 years.

The White House budget (proposed Sept. 19)

Timeline: The Obama administration has endorsed scrapping the current formula for determining how Medicare doctors are paid but, unlike MedPac, doesn’t propose a replacement. Analysts looking at the price tag - $293 billion - believe the proposal would just freeze doctor salaries where they are now, and leave them there for a decade.

Payfors: The September budget did not delve into specific payfors, although the White House’s February budget did target $62 billion in specific cuts to finance the first two-years of change.

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