Conservatives Push for Fully Paid 'Doc Fix' Deal

Momentum is building among conservative senators to scrap an exemption from budget laws in the House-passed "doc fix" deal, a move that would pressure Congress to offset $141 billion of the package's cost not currently paid for later this year, outside groups say.

A Senate conservative aide said senators are considering offering an amendment to require the bill (HR 2) to be fully offset. Among the Republicans involved in the effort, the aide said, are Ben Sasse of Nebraska, Jeff Sessions of Alabama, Mike Lee of Utah, Ted Cruz of Texas and David Vitter of Louisiana.

Sessions and Sasse both expressed opposition to the House-passed bill before senators left for their two-week recess, citing the fact that it’s not fully paid for. The measure would replace the oft-criticized formula Medicare uses to pay physicians known as the sustainable growth rate, or SGR, which would otherwise dictate reimbursement cuts of 21 percent this month.

The Senate is expected to turn to the measure quickly next week, having punted on addressing it after a marathon series of votes on the chamber's fiscal 2016 budget resolution (S Con Res 11). The House passed the bill to replace the SGR on March 26 in an overwhelming 392-37 vote.

Dan Holler, communications director for Heritage Action for America, said he thinks striking the exemption from pay-as-you-go rules seems to be the “most viable path” given the compressed timeframe for action. His group opposes the House-passed bill because it’s not fully offset, but he said it’s very unlikely Congress will come together quickly and settle on changes to entitlement programs to cover the rest of the cost.

The temporary payment patch (PL 113-93) averting cuts to Medicare doctors dictated by the formula formally expired March 31, but the Centers for Medicare and Medicaid Services is holding claims so doctors don't feel the cuts until April 15. With senators returning the afternoon of April 13, that leaves the Senate with only a couple of days to get the bill done.

Stripping out the pay-as-you-go exemption in the House bill would result in sequester cuts next year unless the additional spending was offset later this year.

Holler also said conservatives are trying to refute the idea that the legislation saves money. In a March 25 blog post, Speaker John A. Boehner’s office said the Congressional Budget Office confirmed that the measure “will save taxpayers money and put the nation’s budget on a more sustainable path,” because it costs $900 million less than freezing physician payment rates. The CBO also projected that the measure would add $141 billion to the deficit through fiscal 2025.

Other Options

Marc Goldwein, senior vice president and senior policy director of the Committee for a Responsible Federal Budget, said striking the pay-as-you-go exemption is one way to improve the bill. Alternatively, he said, senators could also add offsets to cover the price tag or strengthen the bill over the long term by making some temporary cuts in the bill permanent, in order to reap additional savings.There’s also the option of scrapping the House deal and passing another short-term "doc fix" deal to avert the scheduled fee cuts.

Goldwein noted that he thinks many senators are concerned about the cost even though they want to dispense with the “doc fix” and the threat of physicians dropping out of Medicare.

“I think if there was more time it would be easier,” he said.

But eliminating the pay-as-you-go provision could offer a workable solution to potential threats by conservatives to oppose the bill. It would give Congress until the end of the year to come up with more offsets, allowing the SGR bill to pass as is after the exemption is deleted.

That means the Ways and Means and Finance committees could explore ways to offset the spending through the regular committee process in coming months.

Under the 2010 PAYGO law (PL 111-139), across-the-board sequester cuts are required to eliminate any increase in the deficit caused by legislation that raises the cost of mandatory spending programs or tax cuts that are not paid for. The cuts would reduce Medicare spending by up to 4 percent and other mandatory spending that is not exempt from sequester.

It’s also possible that the senators who are formulating a strategy on the SGR could attempt to use as leverage a threat not to vote for a conferenced version of the fiscal 2016 budget resolution. The Senate adopted its budget with 52 Republican yes votes before the recess. Two Republicans voted no — Cruz and Rand Paul of Kentucky. The budget needs a simple majority to be adopted in the Senate.

The Senate budget resolution contemplates trillions of dollars in reductions in spending growth with the goal of eliminating the deficit within 10 years.

House and Senate leaders are expected to appoint budget conferees next week.

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