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SGR, Budget Debate to Resume

Congress returns from a two-week recess this week, and the Senate will have until Wednesday to pass a bill that prevents a 21 percent cut in physician Medicare reimbursements. The House passed H.R. 2, the Medicare Access and CHIP Reauthorization Act, with overwhelming bipartisan support before adjourning for recess, but the Senate has still not scheduled a vote on the legislation. H.R. 2 would offset $70 billion of the bill's $210 billion total cost over the next decade. Half of this $70 billion will come from cuts to Medicare beneficiaries through means testing premiums for high-income seniors, the introduction of a deductible to some supplemental Medigap plans, and cuts to hospitals, acute-care providers and insurers. Senators from both sides of the aisle, including Minority Leader Harry Reid (D-Nev.) are urging that Republican leadership allow amendments on the sustainable growth rate (SGR) repeal package. Democrats are pushing for a four-year funding extension for the Children's Health Insurance Program (CHIP). H.R. 2 only contains a two-year funding extension for the program. Democrats may also try to remove the bill's restrictions on abortion and its Medicare therapy caps provision. Senate Republicans are seeking offsets to cover the entire cost of the bill. There are concerns that any modifications to the legislation, which was negotiated by Speaker of the House John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.), could jeopardize its passage as any changes made by the Senate will require that differences be worked out by the House and Senate and passed again before it could become law. Senate Majority Leader Mitch McConnell (R-Ky.) has not yet indicated whether the bill will include amendments. Ranking Member of the Senate Finance Committee Ron Wyden (D-Ore.) has already announced his intention to vote in favor of the SGR repeal bill, though he too hopes to see votes on amendments. President Obama has also expressed support for the passage of H.R. 2. In a report released by the Centers for Medicare and Medicaid Services (CMS) last week, actuary Paul Spitalnic expressed beliefs that Congress will actually need to pass further legislation to ensure adequate access to and quality of physician services in the Medicare program. Though the new payment rates under H.R. 2 would be sufficient in the short-term, Mr. Spitalnic expressed concerns about how Medicare doctors would fare in later years with high inflation. The report confirmed the Congressional Budget Office's (CBO) estimated cost of the legislation, and found that roughly 10 million Medicare beneficiaries would be affected by higher premiums in 2015 as a result of the bill. The Senate has until Wednesday before CMS must pay claims that have been held for 14 days, resulting in the SGR cuts going into effect and CMS making physician payments at the lower rate. Wednesday is also the annual deadline for Congress to pass a budget resolution, though it is uncommon for lawmakers to successfully meet this deadline. Chairmen of the House and Senate Budget Committees Rep. Tom Price (R-Ga.) and Sen. Mike Enzi (R-Wyo.) met during the recess for the purpose of reconciling the differences between each chamber's version of the budget. The passage of a budget resolution will allow policy makers to use the process known as reconciliation to repeal and replace the Affordable Care Act (ACA) with only 51 votes in the Senate, instead of the 60 votes required to overcome a filibuster. An alternative to the ACA will also be necessary should the Supreme Court rule against the Administration in the King v. Burwell case. Should this happen, 7 million people in roughly three-dozen states would lose their federal subsidies to buy health insurance.

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