Expect more healthcare spending battles after Election Day
Post-election battles shaping over healthcare costs
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Despite a politically frozen Congress, outlines of post-election healthcare battles have begun to emerge. As provider, patient and industry advocates lobbied lawmakers during Congress’ last week in session before the Nov. 6 elections, members of both chambers indicated little desire to engage in serious discussions until the outcome of the presidential and congressional elections are known.
The highest-profile healthcare fights will aim to avoid a 2% cut to Medicare providers and insurers; a 27% cut in Medicare physician fees; and a slew of hospital cuts. Those hospital provisions, known as “extenders,” include a payment adjustment for low-volume hospitals, an increase in payments for ambulance services; and continued funding for children’s hospitals’ graduate medical education.
“The impending 2% sequester and 27% SGR cut combined with more than a decade of essentially flat Medicare payments denies medical practices the resources they need to modernize Medicare,” Dr. Jeremy Lazarus, president of the American Medical Association, said in a statement.
Sen. Orrin Hatch (R-Utah) said during a brief interview last week that “people aren’t together yet” on resolving outstanding healthcare policies. “It will have to be brought to a head; that’s for sure.”
The election’s outcome is expected to give the victorious party the upper hand during a post-election legislative session, during which Congress will aim to resolve outstanding legislative business. “It will be a political scrum of the highest magnitude after this election,” Rep. Ed Markey (D-Mass.) said in an interview.
In the current politically uncertain environment, one expectation is that Congress will approve only a one-year reprieve from any of the healthcare cuts, instead of comprehensively resolving any of them.
Rep. Michael Burgess (R-Texas), a physician, told Modern Healthcare that he expects passage of a doc fix by year’s end and suggested a possible duration for the temporary patch. “I would think a year,” he said. “There’s no point in doing anything less than a year because it just causes trouble.”
There also are indications that the postelection negotiations will include some
refighting of the budget battle that occurred last year. Physicians and hospitals are worried that Congress will patch the sequester cuts triggered by the Budget Control Act with other policy tweaks that providers oppose.
A popular source for healthcare spending cuts among some members of Congress is the nonpartisan Medicare Payment Advisory Commission, which has offered a number of ways to reduce Medicare spending over the years. Among MedPAC cuts drawing particular concern from hospitals is a proposal that Medicare reduce payment rates for hospital evaluation and management outpatient office visits to the amount provided in physicians’ offices.
“This would reduce the hospital payment by at least 71% for 10 of the most common outpatient hospital services,” hospital groups said in a Sept. 12 letter to members of Congress blasting the proposal.
Other providers are worried that Congress again will cut funding for initiatives launched by the Patient Protection and Affordable Care Act. For example, legislators cut $5 billion from the law’s Prevention and Public Health Fund to help fund a legislative package in February 2012 that staved off the Medicare physician fee cut until January 2013.
“Raiding (wellness programs) for just a payment fix, which is just a short-term need, is just shortsighted,” said Dr. Glen Stream, president of the American Academy of Family Physicians. Some provider advocates also are concerned that bipartisan proposals to cut physician training funds are likely to return in the lame-duck negotiations.
The controversial savings proposals—as well as other alternatives favored by providers—are designed to avoid adding to the federal government’s historic debt. But it remains highly uncertain whether those options are attractive and valuable enough that Congress will be moved to prevent all of the scheduled cuts to healthcare payments.
Several members of Congress asked about their healthcare priorities as they prepared to leave town focused on expired and expiring Medicare hospital payment provisions.
For instance, Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, which oversees Medicare, named the extender provisions as his leading healthcare priority for the lame-duck session.
Similarly, Burgess said he thinks Congress will pass legislation to extend those aforementioned Medicare programs.
But the Texas Republican added that looming Medicare payment cuts—set to take effect Jan. 2 under the Budget Control Act—could trigger immediate rollbacks on those payments (Sept. 17, p. 6). “I would encourage people not to go out and spend that money when they get the extenders passed because we’re all going to have to deal with it.”
Democrats hope to address all of the outstanding healthcare issues before the end of the year, but the election results will dictate what happens, said Sen. Tom Harkin (D-Iowa), chairman of the powerful Appropriations Labor, HHS, Education and Related Agencies Subcommittee. The sequester cuts might be held off “for a month or two, maybe,” Harkin told Modern Healthcare. “Basically, I see this whole thing happening in January or February, depending on the outcome of the election.”
From left, Democratic Sens. Harry Reid, Patty Murray, Charles Schumer and Dick Durbin take questions Sept. 20 on the Senate’s uncompleted work. As Congress adjourns until after the election, lawmakers say the result will determine how and when they handle looming healthcare cuts.