Today, Senate Majority Leader Harry Reid (D-Nev.) told reporters that he wants to fix the Medicare pay formula “for as long as we can.”

“The doctors are right,” Reid said. “And it’s not just throwing something to the doctors to be nice to them.”

Unfortunately for doctors, “as long as we can” likely won’t be a very substantial span.

Recall that in October, the Senate shot down a plan to scrap the so-called sustainable growth rate formula altogether. The reason was simple: The price tag is upwards of $240 billion over 10 years, and the Democrats hadn’t proposed to pay for it with new revenues or spending cuts elsewhere. With voters well weary of deficit spending, it’s hard to imagine such a proposal passing the Senate four months closer to November’s midterm elections.

On the other hand, the American Medical Association, the nation’s largest doctors lobby, has grown tired of Congress applying short-term patches each year to prevent Medicare cuts to physicians. In a letter to lawmakers yesterday, the group warned that “kicking the can down the road with yet another short-term action magnifies the problem and makes it very difficult for physicians to continue caring for seniors and military families.” AMA is threatening to withhold its support for health reform unless it includes a longer-term doc fix.

So the choice isn’t a good one. Either the Democrats add a quarter-trillion dollars to the debt, or they risk the attacks of the powerful doctors’ lobby in what’s already certain to be a tough election year. Funny that the only option that doesn’t seem to be on the table is finding some way to pay the $240 billion.

“Congress must replace the SGR early next year,” AMA wrote to Senate Majority Leader Harry Reid (D-Nev.) in December.

Unfortunately for Democrats, the future is now.

Because that 60-day patch expires at the end of February, Senate leaders are scrambling for ways to stave off those cuts and satisfy the powerful doctors lobby. So far, they aren’t doing a very good job.

Indeed, the $85 billion jobs package unveiled yesterday by Sens. Max Baucus (D-Mont.) and Charles Grassley (R-Iowa) — which included a seven-month SGR patch — met the immediate opposition of the AMA.

“It is deeply disappointing that the Senate is considering a short-term, band-aid approach through the pending jobs bill,” AMA said in a statement. “Kicking the can down the road with another short-term action increases the size of the cut and the cost of reform — and makes it very difficult for physicians to care for seniors and military families.”

Reid has reportedly stripped the Medicare language out of the jobs bill, to the satisfaction of both AMA and economists who want that package to focus exclusively on job-creating measures. How he plans to address that 21-percent cut before March 1 is another dilemma altogether.

The AMA firmly supports critical aspects of the bill that expand access to health insurance coverage, reform insurer practices, implement administrative simplifications, and promote wellness and prevention. … However, there is still work to be done. [...]

[B]efore any health reform effort, including this one, will prove successful, Congress must address Medicare’s fatally flawed physician reimbursement formula, the Sustainable Growth Rate (SGR). This bill relies heavily on the Medicare program to drive changes in provider and patient behavior in the health care system as a whole. However, delivery reforms and incentive policies will not effectively function while the SGR is still in place.

This is a stronger endorsement than the one AMA gave to the House bill earlier in the year, when the group hinged its support for health reform on an accompanying elimination of the SGR formula. That proposal passed the House last month, but Senate lawmakers killed a similar measure a month earlier because the $245 billion cost wasn’t paid for.

Recognizing that a permanent doc-fix isn’t happening this year, AMA decided not to attach the same condition to its endorsement of the Senate bill. Instead, it attached a warning: Congress — which recently approved a 60-day patch preventing Medicare payment cuts to docs as part of its defense spending bill — must return early next year with plans to provide a permanent solution to the perennial problem.

Physicians, and increasingly patients, are rapidly losing faith in the ability of Congress to address this critical issue. It is for that reason that the AMA will oppose efforts to apply temporary band-aids beyond the 60-day extension included in the FY 2010 Defense appropriations bill. Congress must replace the SGR early next year in order to achieve the access, payment and delivery reform goals envisioned by H.R. 3590. We will not support a final Conference Report without a clear pathway for passage of a permanent repeal of the SGR formula early next year.

The doc-fix issue leaves Democrats in the awkward position of having to return to health care next year just a few weeks after they’re likely to enact the most expansive health reforms in 44 years.

Not only will that not be cheap (failed legislation providing a permanent fix scored near $250 billion), but it also puts Democrats in the awkward position of taking up an urgent health care bill just weeks after they’re likely to enact the most sweeping health care reforms in decades. That the enormous reform bill doesn’t tackle the so-called doc-fix — one of the thorniest and most expensive problems facing the nation’s health care system — will surely leave some voters scratching their heads.

If the proposal sounds familiar, it’s because the Senate considered a nearly identical bill just a month ago. That legislation was shot down, not because lawmakers oppose the underlying concept (nearly everyone on Capitol Hill agrees that Medicare’s physician payment formula doesn’t work), but because Democratic leaders didn’t offset the substantial costs with revenue increases or federal spending cuts. That is, the new spending would have been piled onto the country’s already considerable debt.

Fast forward a month and you might think that House Democrats would take a lesson from the failed Senate bill by offering to cover the costs. But you’d be wrong; the bill is unfunded.

Here’s House Majority Leader Steny Hoyer (D-Md.) tying himself in rhetorical knots yesterday as he tried to explain to reporters why the Democrats aren’t even trying to pay for their proposal.

In our budget we contemplated that the [cost] … would not be paid for. That doesn’t mean it doesn’t have to be paid for – clearly it does. We need to address the fiscal issues confronting us. On the other hand, [the doc fix] has been passed on a regular basis not being paid for.

Here’s what he was talking about. Earlier in the year, House leaders passed pay-as-you-go budget rules, but exempted four big-ticket (and enormously expensive) items that are deemed must-pass bills. The doc-fix was among them.

As a part of the pay-go exemptions, though, the Democrats said one of three things had to happen. Either statutory pay-go has to be law (it isn’t, because the Senate hasn’t passed it); the doc-fix proposal has to be paid for (it’s not); or statutory pay-go has to be attached to the bill as a rider (the House doc-fix bill does this, with the intention that the Senate would pass the requirement that everything other than those four items be paid for through the rest of the fiscal year).

Hoyer explains:

We think it is critical to combine this with a fiscally responsible policy of providing for all but the four specific items we exempted. All other items of spending on entitlements or reductions in revenues would be covered by statutory pay-go. … We think that fiscal discipline is critically important.

This, of course, is a cop out. That is, Congress created Medicare’s flawed pay formula, but no leader of either party seems to want the responsibility of finding ways to pay to fix it.

Also unmentioned here is the political strategy behind tomorrow’s House vote. For years, the American Medical Association, the nation’s largest doctor lobby, has pushed lawmakers to eliminate the doc-payment formula, which is indexed to GDP growth rather than to faster-rising medical inflation. AMA has announced its intention to support the Democrats’ health reforms this year, but they haven’t said they’d do so without the doc-fix accompanying the larger (and very separate) bill.

The House is expected to pass its doc-fix bill tomorrow. But there’s no good reason to think that that the budget hawks in the Senate would have had a change a heart about its cost over the past month. The question is, will the mere effort to pass the bill be enough to win the AMA’s support for the larger reforms? Some are already saying no.

In a little-mentioned move, Democratic leaders stripped the so-called doc-fix provision — which costs $210 billion over 10 years — out of the larger bill in order to keep costs below the magical $900 billion ceiling established by the White House earlier in the year. AMA is endorsing the idea that both would be passed simultaneously. From the letter:

Concurrent passage of [the two bills] represent a critical step in the legislative process that will enable further refinement of policies to lay a solid foundation for achieving our shared goal of assuring high-quality, affordable health care coverage for all Americans.

As a cautionary tale, the Senate tried to pass the doc fix separately last month, and it didn’t go so well.

A Senate leadership aide says the vote is expected to fail. The reason? The bill is unfunded, and Republicans are already lining up against in opposition to the idea of adding a quarter of a trillion more to the debt, while several Democrats are vowing their disapproval as well.

Question is, will the doctors lobby sign on to health reform without it?

A note: We reported on Friday that the bill would come straight to the floor without a cloture vote. And at the time, that was the thinking among Democratic leaders. Since then, however, the negotiations over amendments to the bill broke down. And Republican leaders, believing the doc-fix bill should be paid for, have now made a political calculation to oppose the bill outright. Hence, today’s cloture vote.

With Democratic leaders hoping to bring up legislation to fix, once and for all, the formula to pay doctors who treat Medicare patients, a great deal of attention is being paid to the inconvenient fact that Democrats have not presented a plan to pay for the bill’s $245 billion price tag. Newspaper editorials are attacking the plan as disingenuous; Republicans are blasting it as a bait-and-switch; and even some Democrats are vowing to withhold their support unless the bill is offset with spending cuts elsewhere.

The Washington Post’s Dana Milbank this morning summarizes the GOP reaction:

Republicans, who had been losing traction in their effort to fight a health-care overhaul, could hardly believe the gift the majority had given them.

“I have never witnessed something more sinister!” an agitated Sen. Bob Corker (Tenn.) declared on the Senate floor Tuesday morning. Citing a report that the “doc fix,” as the $250 billion measure is called, was created to buy the American Medical Association’s support for the main health-care bill, Corker accused the AMA of prostitution. “We all know that the selling of one’s body is one of the oldest professions in the world,” Corker said. “The AMA is engaged in basically selling the support of its body.”

It wasn’t supposed to happen that way. When Sen. Debbie Stabenow (D-Mich.) introduced the bill hastily last week, Democratic leaders hoped to pass the proposal quickly, so as to disassociate it from the larger health reform proposal also moving through the chamber.

“We’re doing the doc fix first so as not to get it confused with health care reform,” Sen. Tom Harkin (D-Iowa) told reporters last week. “We’re going to try to pass it as an emergency-type of spending so that it doesn’t … connect to the health care reform bill and figure in as a cost of it.”

The reasons are clear: President Obama has vowed not to sign a health reform bill that adds to deficit spending, and divorcing Stabenow’s doc-fix bill from the larger effort means the White House can make good on that promise. It doesn’t hurt that the move would likely bring the American Medical Association — the nation’s largest physician organization — on board as an influential supporter of the later-to-be-tackled health reform bill.

Still, adding a quarter of a trillion dollars to the debt is no minor occasion. Why Democrats thought they could do it without attracting either media attention or Republican criticism remains a mystery.

The so-called doc fix is being rushed to the Senate floor this week in advance of health reform not because it has nothing to do with health reform but because it has everything to do with it. The political imperative is twofold: to make certain that Republicans don’t use the physician payment issue to bring down the larger bill and to placate the American Medical Association.

Indeed, as we pointed out today, the AMA, the nation’s largest physicians lobby, has so far declined to endorse the Senate health reform legislation. Having lost the insurance industry’s support recently, Democratic leaders are doing everything they can to ensure that the doctors won’t also jump ship. But it comes at the potential cost of adding nearly a quarter-trillion dollars to already enormous federal deficits. From The Post:

This latest maneuver only heightens the fiscal irresponsibility of what already was a fiscal sleight of hand. The measure passed by the Senate Finance Committee patched the problem for one year, at a cost just shy of $11 billion. The argument was that the rest of the problem could be dealt with — and, at least in theory, paid for — later. Now, Mr. Reid proposes not to pay for any of it, not even $11 billion, but simply to write a $247 billion IOU.

The Senate plans to take up the bill this week. The big question is whether it has the legs to get past the fiscal hawks in both parties.

Yet if Rep. Nancy Pelosi (D-Calif.) has anything to say about it (and she does), that plan might not fly. In April, the House speaker, along with House Majority Leader Steny Hoyer (D-Md.), penned a letter to congressional budget leaders promising to withhold their support this year for four different bills — middle-income tax cuts, the estate tax,  relief from the alternative minimum tax, and an increase in Medicare payments to physicians — unless the new spending is offset by cuts elsewhere or increased revenues.

The House will not consider any conference reports on these four bills or any of them directly from the Senate unless these conference reports or bills include statutory PAYGO, the bills are fully offset under traditional scorekeeping, or statutory PAYGO has already been enacted into law.

Today, Pelosi was asked if she stands by the letter. She responded with one word: “Yes.”

Complicating the issue, Hoyer told The New York Times this week that, regarding the doc-fix, he’s not feeling terribly bound to his earlier proclamation that it be paid for.

On this issue, Mr. Hoyer said, “There is a difference between the Senate and the House, and it is a pretty substantial difference.”

Asked whether the House would offset the cost of its proposal, he said, “I don’t think we are going to pay for it.”

Goes to emphasize that the thorniest disputes in this health reform debate have yet to be resolved.