Senate Leaders Reconsider Medicare 'Doctor Fix' That Critics Say Adds $247B to Debt

In the face of objections from members of his own party, Senate Democratic Leader Harry Reid, D-Nev., is backing away from a plan to keep doctors who treat Medicare patients from experiencing drastic cuts in their annual federal reimbursements.

Democratic senators and a coalition of interest groups, including the American Medical Association, are pushing for a so-called "doctor fix" -- a 10-year $247 billion measure to block a planned 20 percent cut in Medicare reimbursement fees to doctors mandated by a 1997 federal law.

But Democrats lack the required support to get the measure passed.

"We do not have 60 votes," Reid's deputy, Sen. Dick Durbin of Illinois, in charge of whipping up votes, said emphatically Tuesday about the number the leader needs to overcome any filibuster.

Supporters of the "doctor fix" say that a long-term fix is needed to provide certainty to doctors, and thereby their patients, who fear the cuts and therefore refuse to treat Medicare patients.

The "fix" would be paid by more federal borrowing for the seniors health care program already steep in debt. It has the support of the White House, but critics say that's only because it appears to reduce the price tag of President Obama's health care reform plan by $247 billion.

Yet taxpayers will still be on the hook for the money.

On Tuesday, Democratic Sen. Debbie Stabenow of Michigan author of the measure, along with the AMA, the AARP and the Military Officers Association of America (MOAA), warned that reduced payments scheduled for next year would lead to fewer doctors accepting Medicare patients or dropping their current ones.

Stabenow described the existing formula as a "kabuki dance" analogous to not paying mortgage payments hoping they will go away, but finding a bigger bill the following month.

The proposal would replace a formula from the 1997 Balanced Budget Act designed to hold down Medicare costs by setting yearly and cumulative spending targets. If actual spending exceeds the target for a given year, reimbursement rates for doctors are lowered the next year. Expenditures have exceeded projections for the past seven years and Congress has passed legislation to override the fix all seven years

The measure originally was expected to be part of Obama's sweeping health care reform legislation. But separating it will allow Democrats to prevent the measure from pushing health reform legislation over the $900 billion ceiling set by Obama. The president asserts that the 10-year plan will be paid in large part through savings in Medicare.

"Frankly, it just shows they're playing games with the numbers and its awful," Sen. Orrin Hatch, R-Utah, told Fox News, who added that the AMA is not representing doctors the way it should.

Senate Budget Committee Chairman Kent Conrad, D-N.D., is leading the way in opposing the unpaid-for Stabenow bill.

"Things have got to be paid for," the moderate Democrat told reporters Tuesday. "I'm not going to advance things that aren't paid for, by cloture vote or any other vote. I'm as clear as I can be."

Conrad was referring to a procedural move known as "cloture" that allows the majority leader, with the consent of 60 senators -- two-thirds, if all 100 members are present -- to move beyond a filibuster.

And Conrad has an alternative to the Stabenow measure. He has paired up with Iowa Sen. Chuck Grassley, the top Republican on the  Finance Committee, to craft an amendment that stops the cuts for two years, a $25 billion measure that both senators intend to pay for with offsets.

Conrad did not yet know, however, from where those offsets would be taken when asked Tuesday.

Beyond the two years, Conrad would look to have a deficit-fighting commission come up with a more comprehensive plan to reform the physician payment process, along with the Alternative Minimum Tax (AMT), and extend expiring tax cuts among other provisions.

It's not known when the Senate will vote on the Stabenow measure but Democratic leaders are aiming to get a vote by the end of the week.

"We're going to take care of the senior citizens and the doctors," Reid said. "It could be a one-year fix. It could be a 10-year fix. But we're going to take care of them."

Some lawmakers have said they are not supportive of the current formula but the $247 billion loss to the government is not acceptable to the more fiscally-conservative Democrats. The 10-year measure is not offset by spending cuts or tax hikes; instead it goes straight to the deficit, which hit an all-time high of $1.42 trillion in the fiscal year that ended Sept. 30.

Hatch, a member of the Senate Finance Committee that passed an $829 billion version of health care reform last week, said the real cost will be $2 trillion over 10 years when this measure and inflation is included.

"Look, this is just another gimmick," he said, adding that Democrats claimed health care reform would be a deficit-neutral bill.

"You're going to be at least $250 billion as of next year in debt over the next 10 years," he said. "CBO even admits it doesn't know what the ultimate cost of this will really be and doesn't know the effect on the premiums will be. None of this is factored into the cost of the bill."

Senate Majority Leader Harry Reid reportedly met with about a dozen doctors groups last week in which he promised to do the doctor fix.

But several people familiar with the meetings say he also made it clear he would expect the support of medical groups for whatever health care bill emerges in exchange for sparing them from the deep reimbursement cuts.

The lobbying groups stood by the measure, and an AARP executive warned opponents of possible political consequences of voting against the fix.

"This will be a recorded vote for AARP," the executive said.

"The AMA is now engaged in selling the support of its body by throwing future generations under the bus by urging that we as Congress pass a quarter of a trillion dollar spending bill -- unpaid for -- and in doing that we might get their support in health care reform," said Sen. Bob Corker, R-Tenn., an opponent of the current health care reform proposals.

The head of MOAA reminded members that 9 million members of the armed forces who are enrolled in Tricare need the "fix," as Tricare is tied to Medicare.

"This is a very important issue for those who have borne the brunt of the past eight years of war," he said.

"The last thing" a soldier needs going off to combat is to worry is a sick spouse or child will be able to see a doctor," he said.

Fox News' Trish Turner and Jim Angle contributed to this report.