House Republican leaders are considering a vote next week on legislation that would abolish cuts to Medicare payments, a policy change that could cost upwards of $174 billion to enact.
Speaker John Boehner (R-Ohio) and his leadership team are quietly coordinating a bill, four sources say, in hopes of ending the decades-long battle over how much doctors and healthcare providers should be paid for treating Medicare patients.
{mosads}But bringing up the legislation would be a huge gamble because it could spark a revolt among fiscal conservatives who are likely to balk at legislation that adds to the deficit.
A backlash on the right could force Boehner to rely on Democratic votes, once again thrusting House Minority Leader Nancy Pelosi (D-Calif.) into the role of deal-maker.
A Democratic aide said the GOP talks on a Medicare fix seemed to have “reached critical mass” this week.
For now, Republicans are keeping a tight lid on their plans. House Majority Leader Kevin McCarthy (R-Calif.) told Republicans in a memo Wednesday that a “doc fix” bill could come up for a vote when they return from this week’s recess. No other details were provided.
Boehner spokesman Michael Steel declined to discuss the leadership’s plans for patching or ending the Medicare formula, which is known as the sustainable growth rate (SGR).
“We are all aware of the looming SGR deadline, and members and staff from both leadership and the committees are naturally discussing a range of options,” Steel wrote in a statement.
The stakes in the fight are high: Congress must act before March 31 to prevent doctors from seeing an automatic 22 percent cut in Medicare payments, an outcome both parties want to avoid.
But attempts to permanently scrap the formula have failed for nearly 20 years, with lawmakers punting the issue time and again after failing to reach agreement on how to offset the cost.
The short-term patches have only driven up the cost to end the formula, with the tab now reaching nearly $200 billion.
The timing of the Medicare fight couldn’t be worse for GOP leaders, who are trying to rally their rank and file behind a new budget blueprint that could cut trillions of dollars from spending in order to balance the federal books.
While a final budget proposal does not need to pass Congress until April 15, the House and Senate are pursuing separate resolutions, forcing votes in both chambers later this month.
Should Boehner choose to pursue legislation scrapping the Medicare formula, Democrats and conservatives could both have leverage to negotiate for their votes.
Democrats are anxious to provide an extension of the Children’s Health Insurance Program (CHIP), a coverage option for the poor that will lose funding this year if Congress does not act.
Conservative lawmakers, on the other hand, want to see changes to controversial policies close to the Obama administration, including one related to medical technology known as the ICD-10 rule.
Sen. Ron Wyden (Ore.), the top Democrat on the Senate Finance Committee, has previously proposed abolishing the Medicare formula, and said he is hopeful that GOP leaders are moving in his direction.
“What we are hearing from the House suggests there is real movement to fully repeal and replace the flawed formula for paying Medicare providers,” Wyden wrote in a statement Wednesday afternoon.
Wyden said he would push to fund CHIP during the negotiations.
The prospect of permanently abandoning the Medicare formula sent shockwaves down K Street on Wednesday, with players in the healthcare industry scrambling for information.
Most healthcare lobbyists and experts had expected another three-month or six-month patch, especially given GOP control of the House and Senate.
Still, a group of leading hospital systems told Congress last month it believed a permanent fix might be possible in 2015.
In a letter to several Senate and House committees last month, the hospitals warned that another temporary fix would result in “significant and damaging” cuts.
Last year’s move by Boehner’s team to reverse the Medicare cuts relied on a suspension of regular order, angering many in the GOP conference.
The House ultimately approved a repeal of the SGR that was paid for with a five-year delay in ObamaCare’s individual mandate. But Democrats opposed that bill, forcing the GOP to adopt another temporary patch.
Even if Boehner managed to get a long-term solution through his chamber, it’s unclear whether the bill could pass the Senate.
A spokesman for Majority Leader Mitch McConnell (R-Ky.) did not return requests for comment Wednesday.
If the House were to adopt its same bill as last year, which would repeal the formula, it would cost $174 billion over 10 years, the Congressional Budget Office reported last month. Freezing the current rates would cost slightly less, at $137.4 billion over 10 years.
Updated at 8:24 p.m.