Committee for a Responsible Federal Budget

Lame Duck Session Could Get Lamer

Sep 24, 2014 | Health Care

Some lawmakers appear poised to push an unpaid-for permanent "doc fix" during this year's lame-duck session of Congress, potentially adding nearly $200 billion to the debt, according to a CQ Roll Call article. Although some lawmakers are looking for offsets, adding the cost to the debt is misguided, especially with so many health care options available which can improve the health care system while also lowering costs.

With a number of deadlines approaching, the lame-duck session after the midterm elections promises to be busy. Lawmakers will have to deal with appropriations again with the current continuing resolution set to expire on December 11, and decide whether to renew a host of predominantly business tax breaks -- known as "tax extenders" -- and whether to continue increased Medicaid payment rates to primary care physicians.

So far, the Senate Finance Committee has passed a two-year extension of almost all of the tax extenders at an $85 billion price tag. Adding a permanent doc fix would increase the cost of the bill to between $200 and $300 billion. Instead, lawmakers should offset the costs of both these bills (and/or pare them down) rather than bundling them together in a fiscally irresponsible giveaway bonanza to special interests.

The patch to the Sustainable Growth Rate (SGR) expires at the end of March 2015, which would result in a 24 percent cut in Medicare physician payments without action. In the lead-up to the last "doc fix" passed earlier this year, there had been bipartisan agreement on a framework to replace the SGR with several years of steady 0.5 percent payment increases followed by a transition to a new system that would encourage physicians to use payment models other than fee-for-service. Based on the latest estimates, this framework could cost $150 billion over ten years, or about $190 billion if the smaller health care extenders are also permanently extended (a simple freeze of current payment rates would cost $130 billion).

However, while there was agreement on the reform plan, there was no such agreement on how to pay for it. A number of plans relied on gimmicks or simply ignored the costs all together.

One motivation for getting a permanent SGR fix done in the lame duck is that many Congressional negotiators of the last compromise are retiring. There may not be enough time in the new Congress to reach a substantive replacement plan agreed to by late March, particularly if the fix relies on reconciliation, which can only happen after a budget resolution is passed.

Using the lame duck to avoid the time crunch and capitalize on the work they have done to pass a fully offset permanent doc fix would be a very responsible way to deal with the SGR. However, if policymakers use the lame duck instead to quickly push through an SGR repeal without offsets, they would be evading their fiscal responsibility and breaking with years of precedent, as the doc fix has been offset 98 percent of the time since 2004.

It's bad enough that in formulating this plan, lawmakers seem to be assuming they get a free pass on not offsetting the tax extenders. Adding the doc fix to the credit card would double down on misguided fiscal policy. The lame duck session should not be an excuse to avoid fiscal responsibility. Both the President's budget and Ryan budget included more than enough savings to offset a permanent doc fix, and there are plenty of bipartisan reforms with enough savings to get the job done.

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