Fox & Friends adds cost of “doc fix” bill to claim health care reform costs more than $1 trillion

Doocy: “You've got it north of a trillion dollars” when you “add” the doctor fix. Doocy stated, “So, even though [Sen. Charles] Schumer just said, you know, do the math, it saves -- well, let's take a look at it. On the big board over there, look at this, they say it will cost -- now keep in mind this is to cover just 94 percent of Americans; 6 percent, sorry -- 94 billion. Plus they say it will cost -- or rather there will be a net-net savings on the deficit of 127 billion. You add those together, you're close to a trillion dollars. Now, when you do that -- look at that. That's the big number: $976 billion. Plus you add the $200 million fix -- and we're going to talk about that very shortly -- and you've got it north of a trillion dollars.”

Carlson: “You got to add” doctor fix to cost of health care reform bill, and “you are over a trillion dollars.” Carlson stated, “The Senate health care reform bill was unveiled yesterday. It's a whopping 849 billion. All right, it's underneath the trillion, but then you got to add a couple more figures to that, like the 129 [billion] for the savings in deficit and then there's this 200 little billion package thing called a doctor fix, so then you are over a trillion dollars.” Earlier, Carlson stated that the $127 billion reduction projected by CBO under the Senate health care reform bill “could be null and void if the doc fix passes.”

Cost of doctor fix calculated from baseline that assumes Congress would allow cuts when it hasn't in the past

Shively: “Congress has been temporarily patching it for years.” As Fox News reporter Caroline Shively noted during a report on Fox & Friends, Congress has repeatedly canceled the cuts scheduled by the sustainable growth rate formula. Shively stated that the doctor fix is “an adjustment to Medicare payments to doctors that would stop a 21 percent cut set for January. The cut is based on a flawed formula that was meant to control the rise in Medicare spending, but it turns out it really socks it to doctors. Now, Congress has been temporarily patching it for years. The doc fix would make that patch permanent."

CBO in 2006: “Legislation has overridden the formula's results in each of the past four years.” In a 2006 brief on “The Sustainable Growth Rate Formula for Setting Medicare's Physician Payment Rates,” CBO noted that the formula used to set annual physician reimbursement rates “unless overridden by legislation, will reduce fees by about 4 percent or 5 percent annually for at least the next several years.” CBO went on to note, “Legislation has overridden the formula's results in each of the past four years, and the prospect of future, year-after-year rate reductions raises the question of whether the SGR formula is a viable mechanism -- and if not, what alternatives might be appropriate.”

CBO analysis of Senate health care bill: Doctor pay formula “has frequently been modified ... to avoid reductions in those payments.” CBO stated that its projections of the cost of the Senate bill “assume that the provisions are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation. For example, the sustainable growth rate (SGR) mechanism governing Medicare's payments to physicians has frequently been modified (either through legislation or administrative action) to avoid reductions in those payments, and legislation to do so again is currently under consideration in the Congress.”

TNR's Jonathan Chait: "[A]dmitting the obvious fact that the reimbursement cuts will never happen would, officially speaking, cost $247 billion over ten years." Chait wrote on The New Republic's The Treatment blog:

More than a decade ago, Congress tried to control Medicare costs by restricting payments to doctors. But the reimbursement cut has proven unpopular. So every year, Congress appropriates more money to fill the hole and keep the doctors happy. Yet the pay cut remains on the books. So, admitting the obvious fact that the reimbursement cuts will never happen would, officially speaking, cost $247 billion over ten years.

Everybody agrees that it's a sham. Since the Democrats are trying to reform, and trim, how much Medicare spends, they planned to wipe the slate clean and just admit the obvious reality that the $247 billion is going to get spent.

Conservatives are attacking this as proof that health care reform is based on fraudulent accounting. See -- they're spending money they don't pay for! National Review calls this “offloading $247 billion in Obamacare costs onto a separate, standalone, unfinanced piece of legislation.” But it's not “Obamacare costs.” It's money that would get spent whether or not health reform happens. It would be fair to make this charge if Obama were using these illusury savings to cover the cost of the new spending in his health care reform, but he isn't. [The New Republic, 10/19/09]

Washington Post's Ezra Klein: Deficit gets "estimated as if Congress was going to allow a 30 percent cut in doctor's reimbursements sometime in the future." Klein wrote on his WashingtonPost.com blog that in overriding the scheduled cuts nearly every year since 2003 without providing a permanent fix for the formula, Congress avoided the cuts and allowed the deficit to be “estimated as if Congress was going to allow a 30 percent cut in doctor's reimbursements sometime in the future, saving hundreds of billions of dollars. That was never going to happen, of course, but it made Bush's budgets look better”:

The “Sustainable Growth Rate” in Medicare was passed by a Republican Congress in 1997 that wanted to ensure Medicare's costs didn't rapidly outpace economic growth. In 1997, that seemed like a plausible thing to do: Health-care costs grew by 4.7 percent that year, and the GDP also grew by 4.7 percent. The linkage seemed natural.

The problem was that the 90s were an aberrant period of low health-care cost growth and high GDP growth. In 2002, for instance, health-care spending grew by 8 percent while the GDP grew by 1.8 percent. The formula embedded in the Medicare Sustainable Growth Rate would have triggered huge cuts to doctors, and broad outrage among seniors. And thus began the era of “temporary” fixes to Medicare payment. The SGR law stayed on the books, but Congress began routinely invalidating its scheduled cuts to doctor payments.

The first was passed in 2003, when Republicans controlled the House, the Senate, and the White House. The next came in 2005. Then there was one in 2006. The next year, Democrats took control of the Congress. They passed fixes in 2007 and 2008. The neat trick of this is that it also made the deficit look smaller than it was, as it kept getting estimated as if Congress was going to allow a 30 percent cut in doctor's reimbursements sometime in the future, saving hundreds of billions of dollars. That was never going to happen, of course, but it made Bush's budgets look better.

Now it's 2009, and rather than passing a temporary fix to the program, Democrats are trying to rewrite the program's formula so it reflects the actual behavior of Congress. [Post columnist Dana] Milbank calls this “novel,” and I guess it is. But not in the way that he implies. Passing bills to “delay” doctor's cuts is a proud, bipartisan tradition in this town. Pretending that it's some Democratic innovation is simply wrong. The only thing that's novel is that the Democrats are trying to solve this problem all at once, and facing down a huge price tag to do so. It would be easier for them to stick with recent congressional practice and pass a small bill putting the problem off for one more year, and one more Congress, as the very Republicans who are criticizing them now did in 2003, 2005 and 2006. [WashingtonPost.com, 10/21/09]