House leaders are working on a permanent fix to the flawed sustainable growth rate formula to prevent another temporary patch to the problem, which has been done 17 times before. However, the plan is likely to face opposition, and it will be a struggle to resolve the issue in time to prevent healthcare providers' Medicare payments from being cut at the end of the month.
Here are 10 things to know about the role politics is playing in the debate to find a permanent solution to the SGR formula.
1. House Speaker John Boehner and Minority Leader Nancy Pelosi are working together to roll out a permanent SGR fix. Although little information has been released about the permanent solution the House is crafting, U.S. Reps. Paul Ryan (R-Wis.), Sander Levin (D-Mich.), Fred Upton (R-Mich.) and Frank Pallone (D-N.J.), the top two members of two key committees, confirmed members of both parties are discussing a permanent fix. "We are now engaging in active discussions on a bipartisan basis — following up on the work done by leadership — to try to achieve an effective permanent resolution to the SGR problem, strengthen Medicare for our seniors and extend the popular Children's Health Insurance Program," they said in a statement, according to The Hill.
2. Although House Speaker Boehner has formed an alliance to find a permanent solution to the problem, the deal he has worked to put together may not sit well with other members of his party or conservative groups. He is expected to pitch the plan to his caucus Tuesday, the National Journal reported.
3. Replacing the SGR formula, as proposed in bipartisan legislation in 2014, would cost $174.5 billion from fiscal 2015 to fiscal 2025, according to the Congressional Budget Office. Along with the $174.5 cost of an SGR replacement, the deal the House is closing in on also includes a two-year extension of the Children's Health Insurance Program. That brings the legislation's price tag to more than $200 billion, and both sides cannot agree on how that should be covered. If an agreement is not reached by the end of the month, lawmakers will need to pass another short-term patch to the tune of approximately $20 billion to avoid a cut of more than 20 percent to providers' Medicare payments, according to the National Journal.
4. Of the permanent solution, about $70 billion of the more than $200 billion total would be offset in the deal the House is putting together. Half of the $70 billion would come from cuts to providers, such as hospitals and insurers, and the other half would come from cuts to Medicare beneficiaries, according to a Politico report.
5. The part of the deal calling for cuts to providers will likely face resistance from hospital groups like the American Hospital Association. In January, the group said it "cannot support any proposal to fix the physician payment problem at the expense of funding for services provided by other caregivers." The American Medical Association, on the other hand, has repeatedly endorsed a permanent fix and is putting together a coalition of physician groups to support the emerging measure, according to the National Journal.
6. Another funding option, which lobbyists and aides have said House negotiators are exploring, involves charging wealthier Medicare beneficiaries more and also implementing a surcharge on "first-dollar" private health insurance plans that are sold to supplement Medicare, according to a Kaiser Health News report. However, that option is likely to face opposition from Democrats, who will take issue with a provision requiring seniors to pay more, according to the report.
7. Another option is to leave the legislation unfinanced. "Tired of yearly SGR battle, veteran members in both chambers may be willing to repeal the SGR on the basis that it's a budget gimmick — the cuts are never made — and therefore financing is unnecessary," according to Kaiser Health News. However, many Republican lawmakers, who have conservative groups putting pressure on them to fully finance any SGR repeal, and some Democrats would likely disagree with that route.
8. In a recent contributed piece to The Hill, Robert E. Moffit, PhD, the Director of the Center for Health Policy Studies at the Heritage Foundation, a conservative think-tank based in Washington, D.C, provided his input on negotiators' plan to rationalize not finding offsets. "Such a combination of cynicism and fiscal irresponsibility, if it came to pass, would be breathtaking," he wrote. "There is no excuse for this. House Energy and Commerce Committee hearings have identified a wide range of bipartisan savings option to fund a permanent doc fix." The Heritage Foundation and other conservative groups have already criticized the emerging deal.
9. Partial financing for the deal may be unpopular, but getting full funding for a permanent solution from the Republican-controlled Congress may be a far greater battle, as GOP leaders are trying to cut trillions of dollars from spending under a new budget blueprint.
10. The CHIP funding extension included in the House deal is a point of contention as well. Republicans would agree to a deal with a two-year extension of the program, but Senate Democrats will likely want a four-year extension like the one called for in legislation from Sen. Sherrod Brown (D-Ohio) that the Senate Democratic caucus signed on to last month.