After two decades of playing hide-and-seek with reforming the way doctors are paid by Medicare, the Senate passed a House bill that would change the fee-based system of paying for medical care and prevent a big cut in payments to doctors.

In essence, the $214-billion initiative would replace a 1990s formula that linked Medicare doctors' reimbursements to economic growth with a new formula more focused on favorable outcomes for patients.

The fee-based billing of Medicare would not be junked entirely, but the bill represents the first major reform of an entitlement in 20 years.

The Hill:

The rare bipartisan bill, which passed 92-8, marks one of the biggest achievements yet from the newly GOP-controlled Congress. It will now head to President Obama, who has promised to sign the bill.

 

Obama praised the doc fix bill and said he "will be proud to sign it into law."

 

"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. 

 

“It’s another reminder of a new Republican Congress that’s back to work,” Senate Majority Leader Mitch McConnell said in a statement.

 

The nearly three-hour voting period began shortly after 7 p.m. on Tuesday, just before a key deadline that would have triggered double-digit cuts to Medicare doctors. The final votes were cast just before 10 p.m.

 

Attempts to schedule a vote had been slowed to a halt by the half-dozen amendments floated by both parties.

 

“The reason we’ve been not moving forward more quickly, is first of all, we had to get some of the holds lifted,” Senate Majority Leader Harry Reid (D-Nev.) said on the floor before the votes. 

 

Senators at one point asked the Obama administration whether they could wait until noon Wednesday without triggering the cuts, but ultimately decided to forge ahead Tuesday night.

 

The Senate eventually voted down all six amendments – three from each party – that had been crucial to bringing the legislation to a vote.

 

An amendment from Sen. Ben Cardin (D-Md.) to repeal Medicare’s limits on physical therapy coverage had caused concern throughout the day because it appeared that it could have enough votes to pass. Any changes to the bill would have sent it back to the House, which would have taken more time and triggered the 21 percent cut to doctor payments.

 

But the amendment ultimately failed to reach the 60-vote threshold, getting 58 votes.

 

The nearly 300-page bill repeals automatic cuts to doctors’ payments under Medicare known as the Sustainable Growth Rate (SGR), ending Congress’s ritual of temporarily putting off the cuts.

The bill would, for the first time, means-test Medicare for wealthier patients – something Republicans have wanted for 20 years.  But the bill is indeed flawed in the way Congress will supposedly pay for it.  At least $73 billion over the next 10 years will have to be paid for by cuts in the budget elsewhere or tax increases.  We all know what that means: $73 billion added to the deficit.

The doc fix has been the most dishonest budgeting ploy in recent memory.  Both Democrats and Republicans have included "savings" from cutting the payments made to doctors in their budget calculations – nearly $500 billion over 10 years.  But each year, the AMA and other doctors' groups fought to have the 21% cut in payments put off.  So each year, just before the deadline, Congress would restore the cuts in pay with a "doc fix."

That kind of budget shell game is now over, and doctors have a chance to get decent reimbursement by concentrating on quality of care.  Theoretically, basing reimbursement on favorable outcomes should reduce diagnostic testing, longer hospital stays, and other costs associated with medical care.  If it works, expect private insurance companies to experiment with reimbursement in this way.