'Doc Fix' Deal Still Has A Long Way To Go

House leaders will try to sell a deal to the their members, but they face roadblocks from industry, conservatives, liberals and the Senate.

National Journal

House Speaker John Boehner and Minority Leader Nancy Pelosi are close to an agreement on the substance of a permanent "doc fix"—but they're still scrambling to sell the plan to skeptics in their own caucuses, the health care industry, and the Senate.

The leaders are fighting intense political battles aimed at both keeping prominent groups such as the AARP and Heritage Action on the sidelines while carving out a wide enough middle ground in the House to pass a bill certain to alienate partisans on both sides.

"I think it's going to be a pretty tricky balancing act," said Dan Adcock, director of government relations and policy at the National Committee to Preserve Social Security and Medicare.

The plan, which Boehner is expected to pitch to his caucus Tuesday, would replace Medicare's payment formula for doctors, which has become a perennial—and expensive—annoyance for lawmakers and doctors alike. If they cannot come to an agreement by the end of the month, lawmakers will need to pass yet another short-term patch, at a cost of roughly $20 billion, to prevent a cut of more than 20 percent in doctors' Medicare payments.

(RELATED: Get Excited, Everyone. It's "Doc Fix" Time)

Democrats have consistently hammered Republicans over proposed cuts in Medicare benefits, but aides are now pressing groups like Adcock's—as well as AARP, the powerhouse seniors' lobby—not to oppose the doc fix deal, even though it includes at least two provisions that would pass more health care costs on to seniors.

"They want everybody to give this deal a chance. They're saying it's better to do this now rather than fight it during budget reconciliation. Or if we wait, the cost of the doc fix will be higher. Those are the kinds of things they're pitching on," Adcock said. "That is what they're saying: 'If you can't support it, don't oppose it.' But their primary message is that people should withhold judgment until they see the final deal."

On the right, Boehner and his allies are trying to quell conservative members' skepticism. The conservative advocacy group Heritage Action came out swinging against the doc fix proposal, angry that Boehner had started off by negotiating with Pelosi and frustrated that the bulk of the package — about $130 billion—would not be paid for under the Congressional Budget Office's normal 10-year window.

Boehner is leaning instead on strong support from Americans for Tax Reform, the anti-tax group headed by Grover Norquist.

(RELATED: Boehner's New Strategy: Enlist Democrats First, Not Last)

Ryan Ellis, ATR's tax policy director, said CBO is expected to release a letter Tuesday clarifying that, while the doc fix deal might not reduce the deficit over the next 10 years, it would lead to considerable savings in the long run.

ATR and Heritage Action made their competing pitches Monday to a group of conservative staffers, where Ellis encouraged them not to worry about the 10-year budget window.

"I could care less about the 10 years. It's entitlement reform," Ellis said. "You would never measure entitlement reform in a 10-year window."

Ellis said ATR has come to the bill's defense so aggressively in part because Heritage Action came out so strong with its argument that the bill isn't paid for. "That's kind of forced us to push an alternative narrative here," he said.

Aides are making a similar pitch to health care industries, according to lobbyists following the issue.

On the policy merits, the American Medical Association has endorsed a permanent doc fix repeatedly—it's the group's biggest priority by far, and it's putting together a broad coalition of physician groups to support the measure Boehner and Pelosi are crafting.

Lawmakers might have a harder time with hospitals, which would absorb a significant share of the bill's provider cuts. A spokeswoman for the American Hospital Association declined to comment on the emerging framework Monday.

(RELATED: How Republicans Could Blow the Budget)

But cuts to pay for a short-term patch could also come from hospitals, making it a question of how much the industry would have to absorb now, versus the costs it would incur over time if Congress can't break the pattern of short-term doc fixes.

The framework essentially treats the doc fix itself as the vegetables that Congress needs, with sweeteners for each side. There's already a bipartisan, bicameral agreement on the specific plan to replace Medicare's payment formula, but previous attempts at a permanent fix have broken down over disagreements about how to offset the cost.

Under the emerging Boehner-Pelosi agreement, those costs wouldn't be offset within CBO's traditional 10-year window, but both parties would swallow some policies they don't like in order to get the doc fix through.

Republicans would agree to a two-year CHIP extension at funding levels set in the Affordable Care Act, while Democrats would give up two Medicare benefit cuts: increased cost-sharing in parts of the program, and a policy requiring supplemental Medigap plans to carry a co-pay.

It's not clear yet whether Boehner and Pelosi can shepherd that deal through their chamber—one lobbyist gave it a 50-50 chance. It would be a big lift in a short time frame, and no one involved in the process seems to have any idea whether the Senate would accept the House deal.

Some Senate Democrats have already indicated that they want a four-year CHIP extension, and the partisan pressures at play in the House will play out in the upper chamber, too—hardline conservatives likely would object to the bill's offsets, while hardline liberals could resist entitlement cuts in addition to lobbying for a better deal on CHIP, which doesn't actually need to be reauthorized until September.

In short, leaders from both parties, in both chambers, have about two weeks to figure out a policy agreement that keeps hospitals quiet, keeps AARP quiet, still makes doctors happy, and that can pass with bipartisan support. If they can't, they'll have to revert to another short-term patch—the 18th temporary fix—and the quest for a permanent bill will start over in a few months.