The problem it tries to address is real—but this isn't the right solution.
The “doc fix” bill that passed the House last week on a 392-37 vote is a piece of cheese that could smell really, really bad by the time the Senate comes back from its spring break to consider the measure.
If signed into law, the bill would halt a scheduled 21% cut in the fees that doctors get for treating Medicare patients. The fear is that if their pay is reduced—and especially if reduced this drastically—many doctors would simply choose to stop treating Medicare patients.
So who proposed the 21% cut in the first place? It stems from a 1997 law that automatically trims physician reimbursement rates if and when medical costs rise faster than overall economic growth. That’s happened so often in recent years that cuts were scheduled 17 times—but each time Congress voted to override the cut. So when the latest scheduled cuts came around, lots of folks expected Congress to kick the can down the road yet again.
All of sudden, however, Congressional leaders of both parties decided they’d had enough short-term fixes and the “doc fix” bill was born.
Here’s what everyone should know about it:
It’s got a real shot of passing
Before leaving town, a solid majority of Senators seemed to be in favor of the measure, even if some liberals and fiscal hawks are holding their noses. And the Obama White House has already signaled support.
It’s a fix, but a very expensive one
The stated price tag is more than $200 billion over 10 years, $140 million of which would hit the federal budget with no compensating spending offsets.
The 17 earlier short-term fixes were funded with $165 billion in offsetting savings from other parts of Medicare. But the bill approved by the House does not provide such offsets, which is why it will raise federal deficits so much.
How much? The Committee for a Responsible Federal Budget, a nonprofit Washington watchdog group, estimates that it will lead to more than half a trillion dollars of additional debt by 2035.
On top of that, affluent seniors will pay more for Medicare; everyone with a Medicare Supplement policy will get nicked with a higher price tag; and health care providers—other than doctors, of course—would be dinged with higher costs.
It could change everything about the way health care is delivered
This is where Messrs. Limburger and Roquefort enter the room. The bill could become a powerful enabler to drastically change, if not end, the traditional fee-for-service model of Medicare.
That’s because the law would create—get ready for two more healthcare acronyms—MIPS and APM. MIPS stands for the Merit-Based Incentive Payment System, which would reward or penalize doctors based on patient health outcomes compared with performance thresholds. APM is short for Alternative Payment Model programs, which provide different rates and incentives for doctor payments. These programs could trigger big changes in how Medicare works and in how doctors perform medicine.
There’s a better solution
A better approach would be an 18th year-long fix. It wouldn’t cost much and thus won’t worsen federal deficits. Rethinking the way we deliver healthcare to Medicare beneficiaries absolutely needs to be done, but not in such a hurry. Take the next year to do this very important but complicated piece of work, and then come back with a true fix worthy of the name.
Of course, this won’t happen. It’s hard enough to get one Congressional consensus these days, let alone two. And we pick a new President next year, which also argues against expecting Congress to again be in a cooperative mood.
Philip Moeller is an expert on retirement, aging, and health. He is co-author of The New York Times bestseller, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” and a research fellow at the Center for Aging & Work at Boston College. Reach him at firstname.lastname@example.org or @PhilMoeller on Twitter.