Lawmakers Weigh Changes To Medicare

Lawmakers this week debated a series of changes to Medicare — including payment shifts in Medicare Advantage plans and a proposed fix to how the program pays doctors. KHN’s Mary Agnes Carey and Politico Pro’s Jennifer Haberkorn discuss.

MARY AGNES CAREY:  Welcome to Health on the Hill, I’m Mary Agnes Carey. Medicare has been a key focus for lawmakers and the Obama administration this week. There are battles over proposed payment changes to Medicare Advantage plans, and members of both parties say they want to permanently repeal a Medicare physician payment formula, but they disagree over how to finance the fix. With me today to discuss these issues is Jennifer Haberkorn of Politico Pro. Thanks for being here.

JENNIFER HABERKORN, POLITICO PRO:  Thanks for having me.

MARY AGNES CAREY:  First let’s start with what happened at the beginning of the week. The Centers for Medicare & Medicaid Services, also known as CMS, decided to not implement some changes to the Medicare Prescription Drug Program, which is also known as Medicare Part D. What were those changes they decided not to move forward with, and why did they make that decision?

JENNIFER HABERKORN:  So, CMS had proposed changing the way that some anti-depressants and other kinds of drugs were paid for in Medicare. It got a ton of opposition from provider groups and patient advocacy organizations who really said that this was going to hurt patients on Medicare. So CMS said, “We’re not going to do that anymore. We’re going to hold off and potentially come back to this decision.” They could come back and make some changes — maybe come back after the election. This got a lot of political opposition, and CMS is under a lot of pressure. Like you said there’s a lot of Medicare changes going on right now and they’re facing a lot of political opposition. To that point, you were at a Medicare Advantage hearing this morning, which I think was the stage of other kinds of opposition too.

MARY AGNES CAREY:  Right, we heard a lot of the same arguments we’ve heard around proposed payment changes to the Medicare Advantage program. Again these are these private plans in Medicare. Almost a third of current beneficiaries are now enrolling in them. There are some payment reductions in the Affordable Care Act. There’s also some payment adjustments that CMS wants to move forward with. There’s a lot of heat on both sides on this. You have many Republicans and some Democrats that say if you lower Medicare Advantage payments, it’s going to hurt beneficiaries and reduce choices. Other Democrats come back and say, “Now, wait a minute, since the Affordable Care Act was enacted, which has these particular payment changes, that you’ve seen premiums drop, you’ve seen enrollment increase, that really the sky is not falling.” So I think this narrative that we’re going to hear now and through the elections – the final Medicare Advantage payment rates are supposed to come out on April 7 but who knows when they will actually be released. That’s the deadline but we’ll see – I just think we’re going to hear a lot of this back and forth in the weeks ahead.

Speaking of back and forth, another big Medicare issue I know you have been following is the sustainable growth rate, we call it the SGR. It’s how Medicare pays physicians. Everybody agrees they want to get rid of it, and we even have a bipartisan bill on how to get rid of it and how to change the way Medicare pays for services. But nobody can seem to figure out the “pay-fors.” A House bill is moving tomorrow. How would that finance an SGR repeal?

JENNIFER HABERKORN: The House has decided that they would pay for this by repealing the penalties in the individual mandate under the Affordable Care Act for five years. That would generate savings because you don’t have to buy insurance under the law. Presumably fewer people are going to do that, and the government would have to pay fewer subsidies. Like you said,  this issue is one that there’s bipartisan support for what to do and a lot of opposition over how to pay for it.

And that’s really coming to a head now because the next “doc fix” patch, as we call it, is expiring at the end of the month. So, Capitol Hill really needs to act before then. They either have to replace this permanently, which looks very unlikely at this point, or has to come up with another patch to prevent a cut to physicians who treat patients under Medicare.

We’re seeing another bill in the Senate that would take the same replacement strategy and not pay for it at all. So we’re going to see those bills come together. I think we’re going to see both the House and the Senate say, “We dealt with this, now the other chamber has to act.” It looks unlikely they’re going to come together and come up with some kind of bipartisan solution, at least before the end of the month.

MARY AGNES CAREY: Maybe we won’t get the big picture solution by the end of the month, but they do have to do a patch. Could it go through the end of the year? Are we talking about a 9-month patch? Any ideas on how they might pay for that?

JENNIFER HABERKORN: It does look like if they do a patch that it would be nine months. That would kick the next time that they have to deal with this to the lame-duck session after the next election. Those are always relatively unpredictable because you have a Congress that — we may see the Senate flip and that would throw everything on its side. I think there’s some hope among Republicans that if that happens, that they can  pay for this through additional cuts to the Affordable Care Act.

Even if the Republicans controlled the Senate, President Obama surely wouldn’t sign that into law. So there is no clear resolution in sight, but they do need to come up with a patch. Traditionally, Congress has turned to health care providers to do that, and there’s no reason to think that they wouldn’t this time, too.

MARY AGNES CAREY: Alright, thanks so much Jennifer Haberkorn of Politico Pro.

JENNIFER HABERKORN: Thank you.

This article was produced by Kaiser Health News with support from The SCAN Foundation.