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‘Doc Fix’ Puts Republicans in Election-Year Bind

(Bill Clark/CQ Roll Call File Photo)
(Bill Clark/CQ Roll Call File Photo)

Majority Leader Eric Cantor is dithering about bringing up legislation to stave off massive pay cuts for doctors set to begin at the end the month, as he worries about political consequences should hospital and nursing home budgets be slashed to pay for the costly bill.  

Members and staff sources told CQ Roll Call that the Virginia Republican is concerned dipping into hospital and nursing home coffers would make Republicans vulnerable to election-year political attacks, especially as they try to convince the public that President Barack Obama’s health care law has negatively affected seniors’ health care.  

The indecision demonstrates the contradiction of governing during an election year. Republicans have said they want to avoid pushing off must-pass legislation until its deadline, wary of public opinion after October’s partial government shutdown. But they are equally wary of giving Senate Majority Leader Harry Reid, D-Nev., any ammo for the midterms or angering powerful lobbying groups, in this case those representing hospitals.  

“It’s been yes, no and I think they’re back looking at maybe,” said Rep. Phil Roe, R-Tenn., a member of the House Republicans Doctors Caucus, a group of members who focus on health care issues.  

Though the issue is hardly a cliff of government shutdown proportions, it does present Congress with a mini-crisis at month’s end.  

A 1997 budget law set Medicare reimbursements to physicians, tying the rates to economic growth. Yet health care costs have risen faster than the economy, so the formula is outdated. Congress has regularly overridden the formula with a policy colloquially called the “doc fix.”  

In a breakthrough, key House and Senate committees agreed on a long-term policy to change the formula last month. The problem is the Congressional Budget Office found that the bill would cost $138 billion over 10 years, and Congress is reluctant to pass anything without offsetting the cost.  

Part of the offset, aides and members said, would likely limit reimbursements to health care providers, such as hospitals and nursing homes. Furthermore, because the bill deals with a tax issue, it must originate in the House and Republicans are worried Democrats would slam them for the unpopular cuts.  

“They have a pay-for, but it’s going to be ugly,” said Rep. John Fleming, R-La., another member of the Doctors Caucus. “They know where they can get the money, but it would probably come from, I would guess, hospitals and nursing homes. … There may not be the heart to do that.”  

The bipartisan framework to fix the formula was released last month by the Senate Finance Committee, along with the House Ways and Means and Energy and Commerce committees. On Feb. 28, some members of the Doctors Caucus signed on, sending a letter of support to Reid; Speaker John A. Boehner, R-Ohio; Senate Minority Leader Mitch McConnell, R-Ky.; and House Minority Leader Nancy Pelosi, D-Calif. Yet even those members said their support is contingent on the offsets.  

That comes as the American Medical Association, the largest group for physicians, has embarked on a lobbying blitz of advertising and contacting members in support of a permanent fix to the formula.  

Hospital groups, however, stand ready to fight back against the policy if their budgets are targeted, which could open up a rift among big political donors ahead of the midterms.  

So while there is wide support for fixing the formula, it remains unclear that there is the political will to deal with the consequences. Rather than working together, the parties and lobbying groups could become mired in a toxic fight.  

Yet another problem is that the bipartisan framework was released before Finance Chairman Max Baucus, D-Mont., resigned to become U.S. ambassador to China. Sen. Ron Wyden, D-Ore., has since taken his place, and House members said they are not sure whether he is as supportive as his predecessor.  

“One of the problems that’s complicating it is it’s difficult to have discussions with the Senate right now because Wyden’s still staffing up,” said Rep. Charles Boustany Jr., R-La., a member of the Doctors Caucus and the Ways and Means Committee. “We can have pay-for discussions all we want on our side, but until we have a partner to work with over there, it can be hard.”  

Members and staff sources said a likely outcome would be yet another temporary solution. Obama signed a three-month patch in December.

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