Congress to Weigh a Plan to Protect Medicare Fees and Children’s Insurance

WASHINGTON - Lobbyists will descend on Congress this week as lawmakers near a bipartisan agreement to finance health care for the oldest and youngest Americans, by revamping the payment of doctors under Medicare and by extending the Children’s Health Insurance Program.

The agreement, negotiated by Speaker John A. Boehner and the House Democratic leader, Nancy Pelosi, would repeal a Medicare formula that threatens to cut doctors’ fees each year. In its place, Congress would establish an “incentive payment system” to reward doctors who receive high performance scores from the government. Scores would be based on factors like the ability to keep patients healthy while controlling costs.

Passage of the legislation would be a significant accomplishment for Mr. Boehner. It would eliminate the need for Congress to go through contortions to set Medicare payment rates for physicians, an annual exercise informally known as the “doc fix.”

Representative Michael C. Burgess, Republican of Texas and chief sponsor of the bill, said, “It removes the imminent threat of draconian cuts to Medicare providers that have created uncertainty for millions of beneficiaries.”

Ms. Pelosi said she was pleased with the results of her unusual collaboration with the speaker. “It’s not a ‘doc fix,’ ” she said. “It’s a fix for America’s seniors so that they can continue to see their doctor under Medicare.”

The bill hit a snag in the Senate at the end of last week. Some Democrats expressed concern about an unrelated provision of the bill that would impose restrictions on abortions at community health centers. Ms. Pelosi tried to tamp down the concern, telling Democrats that the restrictions represented “no change in current policy.”

Without action by Congress, doctors face a 21 percent cut in Medicare payments on April 1. On 17 occasions in the last 12 years, Congress has passed legislation to block such cuts without fundamentally changing the payment formula. Removing the threat of future cuts has been a top goal of lobbyists for the American Medical Association and other doctor groups.

The changes are part of a package estimated to cost $200 billion over 10 years, lawmakers said. The legislation would offset about $70 billion of the cost, with roughly half of the savings coming from higher costs for some Medicare beneficiaries and half from lower reimbursements to health care providers like hospitals and nursing homes.

House leaders have not identified a way to pay the remaining $130 billion. Most of that expense could be added to the budget deficit, a prospect that dismays fiscal conservatives.

The proposals have touched off a frenzy of lobbying by health care providers and consumer groups. Dr. Austin I. King, president of the Texas Medical Association, announced “a massive grass-roots campaign to demand that Congress pass this bill.”

Lobbying groups for older Americans, including the AARP and the National Committee to Preserve Social Security and Medicare, denounced the plan, saying it put too much of a financial burden on patients.

Mr. Boehner described the new costs for beneficiaries as “modest bipartisan changes — structural reforms” that would strengthen Medicare and save money in the long run.

One proposal would require higher-income Medicare beneficiaries to pay higher premiums for coverage of prescription drugs and doctors’ services. Another would require some new beneficiaries to pay more of the out-of-pocket costs now covered by certain insurance policies that supplement Medicare.

The supplemental policies reduce the need for consumers to worry about deductibles and co-payments. As a result, critics say, patients use more services, driving up Medicare costs and premiums for all beneficiaries.

Republicans have argued for years that Medicare beneficiaries would be more cost-conscious if they had more “skin in the game.” House Republican leaders said President Obama’s latest budget request included similar proposals to make some beneficiaries pay more.

However, some conservatives do not like the deal worked out by Mr. Boehner and Ms. Pelosi.

“I’m not very excited about the bill,” said Representative Raúl R. Labrador, Republican of Idaho. “At the same time we’re saying as Republicans that we’re going to balance the budget in 10 years, we’re going to add $120 billion or $130 billion to the deficit, and that seems incongruous to me.”

Representative Tim Huelskamp, Republican of Kansas, said: “I find it very disagreeable that somehow a fix means we just add it to the debt. That’s the fix? That’s not a fix. That’s the same old Washington way of doing things that’s been going on under both parties for decades. That’s why we have $18 trillion in debt.”

The current Medicare formula, established under laws passed in 1989 and 1997, reduces payments to doctors whenever spending for their services exceeds a goal, the “sustainable growth rate,” linked to the country’s economic growth. Under the Boehner-Pelosi proposal, Medicare would increase payments to doctors by one-half of 1 percent a year through 2019. Starting in 2019, doctors would receive bonuses or penalties, depending on their performance.

When Congress passed the Affordable Care Act in 2010, making coverage widely available, some lawmakers said it would reduce the need for the separate insurance program for children. Congress provided money for the program only through Sept. 30 of this year.

But researchers have found that private health plans sold on the new insurance exchanges do not meet the needs of children as effectively as the federal program, known as CHIP, which covers eight million children for at least part of the year. The private plans typically cover fewer services for children and pay for less of the costs.

Unless Congress provides additional money, the National Governors Association said in a letter to lawmakers last month, “more than two million children could lose access to the services they need to thrive.”

Mr. Boehner and Ms. Pelosi have agreed to provide money for the children’s insurance program for two more years. Advocates for children and Senate Democrats said that was not enough; they want a four-year extension, which Mr. Obama also supports.

“How do we leave here taking care of the doctors permanently and shortchanging children, giving them only two years of health insurance?” asked Senator Sherrod Brown, Democrat of Ohio.

Senate Democrats have all endorsed a bill by Mr. Brown to provide money for CHIP through 2019. Congress plans to begin a two-week recess on Friday.