Congress Votes Raise for Doctors in U.S. Medicare Payments

April 14, 2015 3:45 P.M. EDT by Kathleen Hunter

It came just hours before reductions would start affecting physicians.

The Senate passed and sent to President Barack Obama legislation to avert a pay cut for doctors who treat Medicare patients, just hours before reductions would start affecting physicians.

The Senate voted 92-8 in favor of the measure after rejecting amendments that would have required additional House action.

“The reductions in doctors’ reimbursement would take effect at midnight tonight, so I think there’s a bipartisan desire to move forward,” Senate Majority Leader Mitch McConnell, a Kentucky Republican, told reporters Tuesday before the measure passed. Afterward, in a statement, he termed the bill “a sensible compromise.”

“This is great. Let’s do more of this.” -President Barack Obama

Obama, in a statement after the vote, said he will be “proud” to sign the bill. It “directly rewards providers for better quality care” and will “encourage physicians to participate in new, innovative payment models that could further reduce the growth in Medicare spending while preserving access to care,” he said.

The measure marks a rare bipartisan agreement for Congress, which has suffered from low public approval ratings amid gridlock and a partial government shutdown in 2013. The Housepassed the legislation 392-37 on March 26.

“This is great. Let’s do more of this,” Obama said after the House vote last month.

Political Headache

The bill will eliminate an annual headache for Congress. Lawmakers have voted 17 times since 2002 to stop an existing Medicare cost-containment plan from cutting the pay of doctors participating in the health-care program for the elderly. Medicare is projected to cost $622 billion in fiscal 2015.

The bill, H.R. 2, replaces the Medicare formula for physician payments in place since 1997. The American Medical Association, the largest U.S. doctors’ organization, has lobbied annually to head off the pay cuts. The current formula would cut doctors’ pay 21 percent.

The measure also extends the Children’s Health Insurance Program for two years past its current Sept. 30 expiration.

Congress’s Gallup Poll approval rating, which fell as low as 9 percent in November 2013 after a partial government shutdown, reached 20 percent in February.

House votes on the Medicare bill and the chamber’s fiscal 2016 budget marked a turnaround from earlier disputes among Republicans that almost led the Department of Homeland Security to shut down and forced Speaker John Boehner to pull some bills for lack of support.

Democratic Backing

Democrats supported the Medicare measure because they see it as delivering benefits to low-income senior citizens, children and families. They say it would help low-income seniors pay their Medicare Part-B premiums, add $750 million for training nurses and doctors, and secure money for community health centers and the Children’s Health Insurance Program.

The bill provides doctors with annual 0.5 percent pay raises for five years. After that, rates will be frozen for five years and physicians asked to participate in programs that pay bonuses for performing well in quality-of-care tests.

Starting in 2026, physicians’ base Medicare pay will again rise by at least a quarter of a percentage point per ear, in perpetuity.

Taxpayer Cost

The Congressional Budget Office says the legislation would cost taxpayers $141 billion in its first decade, a price tag that would usually cause revolt among fiscal conservatives. An alternate CBO analysis said the measure would cost less than freezing physicians’ Medicare payments for the next 10 years.

The measure would save $70 billion by limiting or cutting some payments to hospitals and other health-care providers and requiring Medicare’s most affluent recipients to pay more out of pocket.

Adjusted for medical inflation, physicians’ pay under Medicare has fallen 18 percent since 2001, according to the AMA. Congress often reduced spending in other parts of Medicare to prevent cuts in payment rates for physicians.

Those policies have collectively saved about $165 billion, according to the Committee for a Responsible Federal Budget, a nonprofit group that advocates for lower national debt.