Congress passes two key bills – action on ‘doc fix’ still needed 

2/1/2012 

Julie Rudowski
Assistant Director,
Government Affairs

1st Session of the 112th Congress ends.

To do list for Congress:

Pass the National Defense Authorization Act for fiscal 2012. Check

Fund the Defense Department for the remainder of fiscal 2012. Check

Permanently repeal the failed Medicare physician payment formula. Fail

Well then, provide another temporary patch so that physicians will not face a nearly 30 percent drop in reimbursement rates Jan. 1 when the current patch expires. Fail

Both the Fiscal Year 2012 National Defense Authorization Act (NDAA) and the defense spending bill cleared Congress and as this publication is headed for the press.

Military personnel will see a 1.6 percent pay raise next year. Also, any increases in TRICARE Prime enrollment fees in any year will be tied to the cost of living allowance (COLA).

The NDAA authorizes $530 billion in the base budget for Defense Department funding, and $115.5 billion for overseas contingency operations.

The bill:

Provides a 1.6 percent increase in military pay.

Caps future health care fee increases to cost of living adjustments.

Makes the chief of the National Guard Bureau a member of the Joint Chiefs of Staff, and provides for a vice chief of staff in the leadership of the bureau.

Creates a statutory framework for the management, administration, and oversight of Arlington National Cemetery.

Makes necessary changes to the Uniform Code of Military Justice in matters related to rape and sexual assault.

Authorizes legal counsel for sexual assault victims and ensuring requests for transfer by said victims are considered by their commander within 72 hours.

Authorizes $45 million to help local educational agencies heavily impacted by military dependents, base closures, and military unit realignments.

Authorizes mental health assessments for the reserve components during unit training.

Enables the federal reserves, such as the Army Reserve and Air Force Reserve, to provide assistance to states during natural and manmade disasters, and providing authority for governors and designated National Guard officers to exercise control over federal military forces in such disasters.

Authorizes new authorities such as a voluntary separation incentive and temporary early retirement to help minimize involuntary separations in any future manpower reductions the services might undertake.

Authorizes $4.5 billion for Army and Marine Corps equipment reset and depot maintenance.

Authorizes approximately $1 billion to support the Army’s planned return to full-spectrum training with fewer units committed to Iraq for combat operations.

Authorizes $13 billion for military construction, base realignment and closures, and military family housing.

Authorizes $325 million for National Guard and Reserve equipment.

Authorizes $255 million to support Abrams Tank industrial base and National Guard modernization.

Authorizes $2.4 billion for Army and Marine Corps tactical wheeled vehicles.

Authorizes $449 million for the Army’s Ground Combat Vehicle program.

The defense spending bill was rolled into a year-end omnibus bill. It provides the Defense Department with $518.1 billion in regular discretionary funding – an increase of $5.1 billion over last year’s level and a reduction of $20.8 billion below the president’s request. In addition, the bill includes $115 billion for Overseas Contingency Operations (OCO).

The bill provides funding for:

Ongoing military operations – The bill contains $115.1 billion – $2.8 billion below the president’s request and $43 billion below last year – for ongoing military operations. This includes funding for personnel requirements, operational needs, and maintenance of facilities and equipment.

Military personnel and pay – The legislation includes $131.1 billion – $4.4 billion more than last year’s level – to provide for 1,422,600 active duty troops and 847,100 reserves. The bill also includes a 1.6 percent pay raise for the military as requested by the president.

Defense health and military family programs – The bill contains $32.5 billion – $1.1 billion above last year’s level and $283 million above the request – for defense health programs to provide care for troops and military families. This includes critical medical research on combat-related illnesses and injuries, including in areas such as brain trauma, cancer, psychological health, hemorrhage control, and prosthetic research.

Operations and maintenance – Included in the legislation is $163.1 billion for operations and maintenance – $7.7 billion below the request and $2.5 billion below current enacted levels. This includes essential funding for military equipment and facility maintenance, base operation costs, and key readiness programs to prepare troops for combat operations and peace-time missions such as flight time and battle training.

Research and development – The bill contains $72.4 billion – $2.5 billion below last year’s level and $2.9 billion below the president’s request – for research, development, testing, and evaluation of new technologies. This funding for basic and applied science research helps advance the safety and success of current and future military operations, and helps prepare forces with the systems and equipment necessary to meet potential challenges down the road.

Equipment Procurement – The legislation provides a total of $104.6 billion – $2.5 billion above last year and $9.8 billion below the president’s request – for new equipment and upgrades to ensure that military forces have the platforms, weapons, and other equipment they need to train, maintain military infrastructure, and conduct successful operations.

Unfortunately, we are once again facing drastic cuts in the reimbursement rates for physicians who treat Medicare/TRICARE patients.

Because payment rates in the TRICARE program are tied to Medicare rates, this affects many military beneficiaries. Each year, Congress implements short-term patches that merely make the problem worse. By Congressional Budget Office (CBO) estimations, it would cost about $300 billion to replace the current formula.

However, that price tag increases each year Congress fails to permanently change the physician payment formula.

The American Medical Association estimates that the 12 temporary patches that Congress has applied have raised the cost of solving the problem by more than 500 percent.

Also known as the "doc fix" (although it never actually gets fixed), tax-extender legislation passed by the Senate included a provision that would have prevented the steep cuts but only until February 2012. House Republicans rejected the plan because they want the Congress to pass a longer term deal.

However, they did not reject it until after the Senate left town for the holiday recess. After the House voted the bill down, they too left town.

It is anyone’s guess how this will end. If history is a lesson though, Congress will return for the 2nd Session of the 112th Congress and will pass legislation retroactively.

However, this causes huge disruptions in physician practices and drives more and more of them out of the system. The Centers for Medicare and Medicaid Services already announced that it told claims processors to hold any claims submitted in 2012 through Jan. 12.

Once again we are urging a call to action.

Go to www.ausa.org, click on "Legislative Agenda" and then "Contact Congress."

Put your zip code in the box entitled "Elected Officials" and then click on the prepared letter "Prevent Medicare/TRICARE Cut."