Aides to House leaders are trying to come up with deal to finally end Medicare payment cuts

Aides to top House Republicans and Democrats are trying to negotiate a bipartisan compromise to permanently revamp a law that annually threatens cuts in Medicare payments to doctors, including a 21 percent reduction set to take effect April 1.

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As part of the talks, bargainers are considering budget cuts that could offset part, but not all, of the measure's costs, according to lobbyists following the negotiations. The estimated 10-year price of repealing the annual Medicare cuts is roughly $175 billion.

The lobbyists said Wednesday that the package also might provide money for a children's health program that would otherwise run out of money Oct. 1. A four-year extension of the Children's Health Insurance Program would cost about $10 billion.

The lobbyists, who spoke on condition of anonymity to discuss information gathered from congressional staff, said the talks are continuing and details could change. They say lawmakers might have to settle for a temporary bill, which they have done many times before. Congressional aides confirmed talks are underway but declined to provide detail.

"We are all aware" of the approaching deadline, said Michael Steel, spokesman for House Speaker John Boehner, R-Ohio. "Members and staff from both leadership and the committees are naturally discussing a range of options."

At issue is a formula, known as the sustainable growth rate, from a 1997 budget-cutting law that included curbs on doctor's reimbursements under Medicare, the federal health care program for the elderly. The formula has repeatedly forced Congress to defuse cuts that over time have grown unrealistically high.

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Lawmakers from both parties are eager to end Congress' annual struggle to avoid the fee cuts and find savings to pay for it. Disagreements over how to pay for preventing the cuts has long been the most intractable dispute.

Before the House left Washington last week for a recess, House Ways and Means Committee Chairman Paul Ryan, D-Wis., told a reporter that it was most likely that Congress would temporarily avoid the fee cuts. But, he added: "That's not our goal, though. We want to get a full deal."

Sen. Ron Wyden of Oregon, top Democrat on the Senate Finance Committee, said Wednesday that replacing the fee cuts with a new payment system would put Medicare on "a sustainable path going forward." He said providing money for the children's health program was also "critically important."

The prospects for congressional passage of a package whose cost is not fully financed are unclear.

The measure would have to get by conservative Republicans reluctant to drive up budget deficits. Depending on what savings the package would impose, the measure could meet resistance from Democrats if it relies too heavily on reductions to Medicare beneficiaries.

If agreement can't be reached on a permanent package, congressional leaders would try passing a bill that temporarily forestalls the Medicare payment cuts for a few months, providing more time to work out a deal.

That rationale has been used before, without ultimate success.

Since allowing a 4.8 percent Medicare fee cut in 2002, Congress has passed 17 bills that have temporarily avoided the reductions. The cost of those measures has totaled around $170 billion — comparable to what it would cost to permanently repeal the automatic payment cuts.

The Children's Health Insurance Program, which also dates from 1997, serves around 8 million children a year.

Though its money doesn't expire until October, the program is broadly supported by state governors of both parties. Governors have lobbied Congress to provide money for the program soon, because many states have fiscal years that begin during the summer and have legislatures that only meet early in the year.

Groups including the American Medical Association and the American College of Physicians have also lobbied to permanently end the Medicare cuts. The temporary fixes "have created nothing but trouble for physicians, patients and Congress," the medical association's president, Dr. Robert Wah, said in an interview.