The "Doc Fix": Reforming Medicare Reimbursements For Doctors and Reauthorizing Other Medical Programs (H.R. 2)

What is H.R. 2?

(Updated October 21, 2019)

This bill was enacted on April 16, 2015

This bill would reform Medicare’s Sustainable Growth Rate (SGR), a formula used to determine physician reimbursement. The bill would extend the Children’s Health Insurance Program (CHIP) by two years, while implementing other changes to Medicare and related health programs.

The SGR was established in 1997 to set the Medicare payment rates for physicians. It was designed to ensure that the spending per beneficiary for physician services would "grow on average at the rate of increase in gross domestic product per capita minus the expected rate of increase in productivity for the economy as a whole." 

This bill would repeal the current SGR that is currently scheduled to reduce physician compensation by 21 percent on April 1, 2015. The SGR would be replaced with plan to give physicians a 0.5 percent annual pay increase through 2019. After that, doctors would operate in a system that either grants them bonuses or penalties based on their government performance scores.

Funding for CHIP would be extended until 2017, as it would currently run out of money after the 2015 fiscal year despite the program being authorized through 2019. If you don't know, CHIP is a program offering low-cost health coverage to children from families that earn too much money to qualify for Medicaid. It is offered in every state and as of 2013, covers more than eight million children and pregnant women.

This bill also authorizes another two years of funding into 2017 for the Community Health Center (CHC) Program, that is otherwise set to expire in September 2015. In 2013 the CHC served 22.7 million patients across 9,518 sites.

Argument in favor

This bill would strengthen Medicare by permanently repealing the Sustainable Growth Rate (SGR), it will save taxpayers money, and put the U.S. budget on a more sustainable path.

Argument opposed

"Sustainable"? This bill wants to permanently repeal the SGR without meaningful spending reductions — adding $141 billion to federal deficits seems like the opposite of putting U.S. spending on a better path.

Impact

Patients enrolled in Medicare and/or CHIP, physicians providing services through Medicare and/or CHIP, the Department of Health and Human Services (HHS), the Secretary of HHS.

Cost of H.R. 2

A CBO estimate found that enacting this bill would increase both direct spending (by about $145 billion) and revenues (by about $4 billion) — resulting in a $141 billion increase in federal budget deficits.

Additional Info

Of Note: Congress has been forced to pass 17 of these so-called “Doc Fix” bills in the last 11 years, with many ready for a long-term solution to be put in place. While this legislation does have bipartisan support in both chambers of Congress, it has been met with concerns from both sides of the aisle as well.

This bill would extend specific Medicare programs, including those for Medicare-dependent hospitals, Medicare Advantage plans for special needs individuals, and funding outreach regarding low-income programs - among others.

The qualifying individual (QI) program would be permanently extended — allowing it to assist low income individuals in covering the cost of their Medicare Part B premium. The transitional medical assistance (TMA) program — helping families covered by Medicaid to maintain their coverage for up to one year as they transition from welfare to work — would also be extended permanently.

Programs for Native Americans with Type I and Type II Diabetes would be extended through 2017. Also extended through 2017 would be abstinence only programs and the personal responsibility education program (PREP) which allows states, tribes, and other local agencies to implement strategies for youth development, adulthood preparation, and preventing teen pregnancy and STD transmission.

Beginning in 2020, new enrollees to Medicare's supplement insurance, Medigap would only receive first-dollar coverage (i.e. the plan pays both deductibles and copayments) after the amount of the Medicare Part B deductible (which is currently $147 per month).

Income-related premium adjustments for Parts B and D would increase the percentage that Medicare beneficiaries with incomes between $133,501 and $160,000 as individuals (or $267,001 - $320,000 as a couple) from 50 percent to 65 percent. Beneficiaries that have incomes at or above $160,001 or ($320,001 as a couple) would pay 80 percent of their premium. These thresholds would be updated based on inflation beginning in 2018.

Media:

• Sponsoring Rep. Michael Burgess (R-TX) Press Release
• CBO Cost Estimate
• House Energy and Commerce Committee and Ways and Means Committee Summary
• NPR
• American Health Information Management Association
• Hospitalist News
• National Journal (Context)
• The Hill (Context)
• Center for American Progress (In Favor)