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Just 24 hours before physicians would face a 21% cut in their Medicare pay, the U.S. Senate overwhelmingly passed legislation that would permanently remove the sustainable growth rate formula that dictates pay.
The fix will cost $220 billion over the next 10 years; Congress has identified about $73 billion in cuts to other programs to help cover the cost.
The Senate’s reform package mirrored a House bill approved two weeks ago. President Obama has said he will sign it. "It’s a milestone for physicians, and for the seniors and people with disabilities who rely on Medicare for their health care needs," he said in a statement.
The Senate vote on the bill began shortly after 7:00 pm on Tuesday, just before a key deadline that would have triggered the 21% cuts to Medicare doctors. The final votes were cast just before 10:00 pm. A vote on the legislation got bogged down by amendments from both parties, including one from Sen. Ben Cardin, D-Md., to repeal Medicare’s limits on physical therapy coverage. But the amendment ultimately failed to reach the 60-vote threshold, getting 58 votes.
Once signed by the President, the bill would repeal annual, automatic cuts to doctors’ payments under the Sustainable Growth Rate (SGR). “This has been a long ordeal that a lot of us have worked on for a long time,” Senate Finance Committee chairman Orrin Hatch, R-Utah, told the media ahead of the vote, calling it a “major, major accomplishment.” Congress has interceded 17 times to halt the physician pay cuts.
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House Speaker John Boehner, R-Ohio, who quietly started negotiations on the bill earlier this year, has similarly praised the bill as “the first real entitlement reform in two decades.”
Prior to the vote, conservatives in the Senate remained concerned about how the bill was going to be paid for. To win support from them on the overall bill, leadership allowed a vote on an amendment from Sen. Mike Lee, R-Utah, that would have forced lawmakers to fully pay for the bill. The measure was defeated, 58-42.
The bill will cost $214 billion over 10 years, with $73 billion of that cost offset with spending cuts or new revenue, according to the Congressional Budget Office (CBO). The bill includes reforms to transition Medicare’s payment system from incentivizing quantity to quality in care and is likely to produce small savings for the government over time, according to the CBO.
However, Sessions and conservative groups like the Heritage Foundation pointed out that the Medicare agency’s actuary warned last week that Congress could need to pass more legislation down the road to ensure that Medicare doctors do not lose out in the second decade of the law.
To help pay for the measure, the bill makes beneficiaries paying more than $133,000 a year to pay a higher share of premium costs. Democrats had also objected that the bill includes just two years of funding for the Children’s Health Insurance Program. An amendment to increase it to four years of funding failed on Tuesday.
The Centers for Medicare and Medicare Services told providers last week that it is already preparing to make the 21% cuts if Congress does not act. But officials also sought to calm tensions by pointing out they can hold checks for 14 calendar days under current law to temporarily protect doctors from the cutbacks.
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