Is this the year the doc-fix actually gets fixed? 

December 6, 2013

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When most Americans think about December, they conjure up images of holidays and snow. For congressional health policy aides, the end of the year means something totally different: Time for the regular, depressing doc-fix ritual.

The "doc-fix" is health policy shorthand for the payment patch that Congress regularly passes in December to prevent a really big cut to Medicare doctors' salary. It is the scourge of the health policy world because it's actually not a fix at all. The various doc-fixes don't repeal the 1998 law that allots too little funding to keep Medicare doctors' salaries steady. Instead, they push off dealing with the law by a few months.

Except, Congressional aides have a bit more holiday cheer this year: Congress is inching closer to a permanent doc-fix repeal than it has in more than a decade.

"It's a striking contrast," says John Rother, president of the National Coalition on Healthcare. "The politics are so amazing, that they're working so closely together."

What legislators have done this year — and what they haven't done for years now — is write a bipartisan, bicameral plan for how they want to change the way doctors get paid. It's now moving through the Finance Committee in the Senate and the Ways and Means Committee in the House. A Finance mark-up of the latest proposal, released Thursday, is scheduled for next week.

This is by no means a done deal: While Congress has come up with a plan to change the way doctors get paid, they still don't have a plan for how to pay for those changes. They need to come up with $139 billion in spending cuts to shore up Medicare payments for the next decade.

This is a much lower price tag than the doc-fix has had in the past. Because of the slowing growth in health-care costs, the Congressional Budget Office's estimate of how much it will cost to shore up Medicare doctors' payments for the next decade has fallen from $276 billion in 2010 to $139 billion this year.

"The pay-for is a lot less," says one Democratic House aide, who requested anonymity to discuss ongoing negotiations. "That alone was a huge incentive to tackle this issue now."

"People are tired of doing this end-of-year exercise," a Republican Senate aide said. "The committee hasn't even examined the policy side for at least a decade."

Congressional aides say that the doc-fix talks usually get hung up on disagreements over how to pay for the plan. So, this year they started with the policy, trying to figure out whether there would be bipartisan support for changing the way doctors get paid.

Turns out, there was: Legislators are moving forward on a proposal that pays for value rather than volume. The bicameral plan would, among other things, ramp up value-based purchasing programs, tethering 4 percent of doctors' salary to the quality of care they deliver in 2017. That number would ramp up to 10 percent by 2020.

sgr table

The proposal would take other steps, too, to encourage doctors to move into payment programs where reimbursements are tethered to performance metrics. The idea would be to move Medicare away from fee-for-service payments, where doctors get a flat fee regardless of how well — or poorly — their patients do.

While these policy issues have gotten bipartisan support, they don't say much about whether legislators will come together on plans to pay for the doc-fix. The $139 billion price tag is certainly smaller than what the permanent fix would have cost in the past — but it's not exactly pocket change, either.

"It's obviously a lot less than it was before," the Republican Senate aide said of the cost of paying for the permanent doc-fix. "But that's where the debate will be."

Because of that debate, sources on and off the Hill don't expect a full doc-fix to pass in 2013. With just one week left before legislators head home for the holidays — and plans for how to pay for this fix still not written — that is pretty much impossible.

Instead, the best-case scenario they outline is one where Congress passes a short-term fix for about three months, giving themselves a bit more time to find the $139 billion in budget cuts necessary to pay for a full doc-fix repeal.

"Talk about a one-year patch would be less conducive to movement," says one Republican Senate aide familiar with the ongoing discussions. "Three months is a little more conducive and keeps up the momentum."

KLIFF NOTES: Top health policy reads from around the Web.

About 10 percent of the 834 transmissions have errors. "One administration official tells The New Republic that preliminary estimates, just now becoming available, suggest the error rate has fallen from one in four during October to one in ten now. And most of those are files insurers received with errors, as opposed to files insurers never received. Plenty of work remains — namely, completing repairs that reduce the error rate further and dealing with the flawed data insurers have already received. But the administration is working with insurers and contractors on both issues." Jonathan Cohn in the New Republic.

The state exchanges are having 834 problems too. "Many of these 14 states and the District of Columbia have been eager to tout the success of their own exchanges compared with the bungled federal portal, but they now appear to be worrying about back-end problems similar to those afflicting HealthCare.gov. Insurers in Kentucky and New York, for example, say they’ve received flawed 834 enrollment forms from their local exchanges, though the extent of the errors is unclear. Washington state has already had to correct thousands of 834s with faulty information about federal tax credits." Kyle Cheney and Jason Millman in Politico.

Federal glitches are bad news for state exchanges, too.  "The Obama administration's botched launch of the health law's online marketplaces has created problems for Rhode Island even though the state's own locally built system has been working well, HealthSource RI executive director Christine Ferguson acknowledged Thursday. 'For us what happened at the federal level has been somewhat devastating,' Ferguson said during a taping of myRITV's Executive Suite. 'If you think about marketing — anytime you have to do marketing or sales, if you've got some huge thing that's affecting your ability to get your message out, it seriously dampens your ability to do it.'" Ted Nesi for WPRI.

California has a backlog of 25,000 paper applications. "In response to higher-than-expected demand, the Covered California exchange said it is adding staff and expanding its capacity to answer consumer calls. It received 17,000 calls in less than an hour Wednesday, more than it received in an entire day in recent weeks. The exchange is also trying to dig through a backlog of 25,000 paper applications filed in October and November." Chad Terhune in the Los Angeles Times.

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