CBO Calls Baloney on Using War Money to Pay Medicare Docs (Updated)

Posted March 31, 2014 at 3:27pm

Updated 3:54 p.m. | Congressional budget scorekeepers don’t sound impressed with using projected savings from not fighting wars in Iraq and Afghanistan to prevent slashing paychecks for doctors.  

In a cost estimate released Monday, the Congressional Budget Office explained that $601 billion in projected savings from limits on the Overseas Contingency Operations account might never be spent anyway, and noted there’s no funding currently provided for the OCO funding.

“As a result, reductions relative to the baseline might simply reflect policy decisions that have already been made and that would be realized even without such funding constraints. Moreover, if future policymakers believed that national security required appropriations above the capped amounts, they would almost certainly provide emergency appropriations that would not, under current law, be counted against either the existing caps on discretionary funding or the proposed new caps on funding for overseas contingency operations.”

Thus, the CBO expects that a future Congress would pay for wars overseas that may take place over the next decade, even if the OCO funds are capped in the meantime. That shouldn’t be a surprise, even to Finance Chairman Ron Wyden, D-Ore., who is pushing to break from the cycle of patches and stopgaps. Wyden sought consent to set up a vote on the proposal to use the OCO funding, referencing past support for the idea from former Republican Whip Jon Kyl, R-Ariz.  

“A lot of good work has gone into this bipartisan, bicameral reform plan that finally repeals and replaces the SGR. Doesn’t that deserve a vote?” Wyden asked, speaking of his longer-term bill.  

Wyden ultimately traded objections with GOP senator Jeff Sessions, R-Ala. Sessions offered a counterproposal to pay for fixing the doctor payment issue using funds from repealing the individual mandate to purchase health insurance in the Obamacare law. That’s a non-starter for Democrats, of course.  

Majority Leader Harry Reid, D-Nev., reiterated Monday that he would prefer the permanent repeal of the sustainable growth rate formula, but he acknowledged Wyden’s plan to pay for the measure with funds from winding down overseas wars does not have the votes.  

“I wish we could have followed the chairman of the Finance Committee,” Reid said. “And he wants to pay for it in a way that I think is appropriate, to use the unspent money that we have for the wars in Iraq and Afghanistan, OCO, the overseas contingency fund. But at this stage it doesn’t appear that that is going to happen now.  

“So while I am pleased with this temporary patch, I hope it is our last patch,” Reid continued.  

Reid said that much of the replacement was negotiated by former committee chairman Max Baucus, D-Mont., who is now ambassador to China.  

In Wyden’s view, the current Medicare payment reductions under the SGR are what he has repeatedly called “Medicare make-believe.”  But because Monday is the last day before the latest round in payment cuts are set to kick in, the Senate’s moving forward to clear yet another “doc fix” patch. It’s the same measure that the House passed last week on a surprise voice vote .  

“We need to take action on this to make sure that Medicare patients will be able to see their doctors,” Reid said on the Senate floor.  

The issue also has pitted two powerful interest groups against one another.  

In a letter sent to all senators on March 28, the American Medical Association urged a “no” vote on the one-year “doc fix” because it would kill the possibility of finding agreement for on paying for a repeal of the law cutting doctor pay.  

“We urge a NO vote when this bill comes before the Senate next week,” the AMA wrote. Passing the patch “will eliminate prospects for action on the bipartisan repeal package this year.”  

But the AARP, which advocates for seniors, backs the one-year fix, citing a concern that fewer physicians would take Medicare patients if Congress does not act.  

“Constant threats of large physician cuts cause beneficiaries to worry that their doctors and providers will no longer be able to see them,” AARP Executive Vice President Nancy LeaMond said in a statement on March 27. “Given we are near the current deadline, AARP believes a short-term patch will provide temporary program stability as we work for a longer-term bipartisan solution. Congress must reassure America’s 50 million Medicare beneficiaries that their health care providers will still be able to see them.”