House leaders close in on $200B Medicare deal

House leaders are closing in on a deal to permanently avert cuts in payments to physicians under Medicare, two House aides confirmed Friday.

The deal would offset only about $70 billion of the more than $200 billion cost of making the permanent fix, however. This would likely draw opposition from conservatives over budget concerns.

{mosads}Late Friday afternoon, Reps. Paul Ryan (R-Wis.), Sander Levin (D-Mich.), Fred Upton (R-Mich.) and Frank Pallone (D-N.J.), the top members of two key committees, confirmed they are in talks for a permanent fix. 

“Last year, the Ways and Means and Energy and Commerce Committees came together, on a bipartisan basis, to propose a permanent alternative to the broken SGR system,” they said in the statement. “We are now engaging in active discussions on a bipartisan basis — following up on the work done by leadership — to try to achieve an effective permanent resolution to the SGR problem, strengthen Medicare for our seniors, and extend the popular Children’s Health Insurance Program.”

The proposal comes after negotiations this week with House GOP and Democratic leaders, though details have not been finalized. Michael Steel, spokesman for House Speaker John Boehner, said Friday he could not confirm the details.

The statement indicates committees are now taking a more active role. 

Democrats would be widely expected to back the deal, and their votes would be key to getting the vehicle passed in the House and Senate.

It would also include a two-year extension of the Children’s Health Insurance Program (CHIP), aides confirmed, which is a priority for Democrats. The deal would be a compromise for Democrats, who hoped for a four-year extension of the program.

Including the children’s program would drive the bill’s total cost to over $200 billion. The so-called “doc fix” portion would cost an estimated $174 billion over 10 years, according to the Congressional Budget Office.

“Assuming Boehner has backing for the deal, this would likely be the deal,” a House aide said Friday.

It’s unclear where lawmakers would exactly find the $70 billion in offsets. That figure and the broad outlines of the deal were first reported by Modern Healthcare.

Some fiscal conservative groups — such as Club for Growth and the Heritage Action Foundation — have already blasted the emerging proposal.

“Americans didn’t hand Republicans a historic House majority to engage in more deficit spending and budget gimmickry,” said Heritage Action spokesman Dan Holler on Thursday. “Any deal that only offsets a fraction of the cost, like the one currently being discussed behind closed doors and leaked to the press, is a non-starter for conservatives.”

Several House Republicans are almost sure to vote against a bill that does not fully offset the cost of the legislation.

Members of the GOP Doctors Caucus, which has long pushed to eliminate the Medicare cuts, have argued that Congress does not need to offset all of the costs.

Rep. John Fleming (R-La.), co-chairman of the GOP Doctors Caucus, said Thursday he strongly believes the bill will clear the House this spring. Still, he acknowledged that it would be a struggle to convince some fiscal conservatives to pass a bill that would add to the deficit.

“Many of the party’s fiscal conservatives say we should find a way to pay for all of it, but then again I don’t think they understand, as we do as doctors, that that puts our colleagues into a very difficult situation,” Fleming said.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) also suggested Thursday he would back the measure even if it was not fully paid for.

“I’d do it no matter what it takes,” he said.

Negotiations have remained nearly entirely at the leadership level, though some House Democrats held a call Friday to discuss the plans. Members of the Doctors Caucus have said they have been out of the loop of discussions and were taken aback by the sudden movement of their proposal.

Time is running out for a deal. If Congress does not act before March 31, Medicare providers nationwide will face cuts of more than 20 percent.