Fix is in—they hope

Groups make Medi­care SGR re­form pri­or­ity

Modern Healthcare - - The Week In Healthcare - Jen­nifer Lubell

In the race to get health re­forms ap­proved by the end of the year, doc­tors and other health­care lob­by­ing groups are hop­ing that Medi­care’s physi­cian pay­ment fix will be the first to cross the fin­ish line.

But as the Se­nate moves to con­sider a bill on the floor next week to re­move the trou­ble­some for­mula that sets Medi­care pay­ment rates for doc­tors, murky ques­tions re­main on how the multi­bil­lion-dol­lar prob­lem will ul­ti­mately be paid for.

Medi­care’s physi­cian pay­ment for­mula is driven by the sus­tain­able growth rate, or SGR, which is based on the econ­omy’s health, and has pro­duced re­sults that have threat­ened pay­ment cuts to physi­cians since 2003. Congress has stepped in ev­ery year to en­act a tem­po­rary fix so that doc­tors won’t ex­pe­ri­ence ad­di­tional re­duc­tions to their Medi­care pay­ments, a mea­sure that racks up ad­di­tional costs and adds to the frus­tra­tions of doc­tors who want a per­ma­nent so­lu­tion.

Physi­cians in 2010 face a 21% cut to Medi­care re­im­burse­ment un­less Congress in­ter­venes once again. The Con­gres­sional Bud­get Of­fice has es­ti­mated it would cost $285 bil­lion to fix the SGR.

Health­care re­form over­hauls in both the House and Se­nate al­ready con­tained mea­sures for ad­dress­ing Medi­care physi­cian pay­ment re­form, but the is­sue seemed to take on a life of its own last week when Se­nate health­care leaders held a sum­mit with the ma­jor med­i­cal groups to sup­port a stand-alone bill by Sen. Debbie Stabenow (D-Mich.) to re­move the SGR en­tirely from the pay­ment for­mula.

“What the Stabenow bill does is take the SGR out of the pic­ture, al­low­ing us to work on an al­ter­na­tive” pay­ment sys­tem for doc­tors, said Lori Heim, the new pres­i­dent of the Amer­i­can Academy of Fam­ily Physi­cians. The bill does not pro­pose what the new for­mula would be, “but we can’t get to the new for­mula un­til we take care of the cur­rent one.”

Physi­cian groups have long ad­vo­cated for the SGR to be re­placed with the Medi­care Eco­nomic In­dex, a mea­sure of inflation that in­cludes a bun­dle of in­puts used in fur­nish­ing

physi­cian ser­vices such as a physi­cian’s own time, non­physi­cian em­ploy­ees’ com­pen­sa­tion, rent and med­i­cal equip­ment.

The physi­cian lobby claims a one-year “fix” in­cluded in leg­is­la­tion ap­proved by the Se­nate Fi­nance Com­mit­tee last week wasn’t ad­e­quate to ad­dress the prob­lem. “We need com­plete, com­pre­hen­sive pay­ment re­form and not one-year Band-Aids,” said Jack Lewin, CEO of the Amer­i­can Col­lege of Car­di­ol­ogy.

Doc­tors aren’t the only ones in health­care who want this prob­lem solved soon. The AARP, in telling Se­nate Ma­jor­ity Leader Harry Reid (D-Nev.) that the physi­cian fix was its “No. 1 pri­or­ity,” is send­ing out a clear mes­sage that they want doc­tors to con­tinue treat­ing Medi­care pa­tients.

Stabenow’s bill ap­pears to be charg­ing full-speed ahead of the larger health­care re­form de­bate, ap­pear­ing for con­sid­er­a­tion on the Se­nate floor as early as this week. “It is im­por­tant we get this right—we fix what has been a very flawed sys­tem,” Stabenow said.

Ad­dress­ing the Medi­care pay­ment fix sep­a­rate from health­care re­form would also be the “pre­ferred” op­tion in the House, Rep. Chris Van Hollen Jr. (D-Md.), who sits on the House Ways and Means Com­mit­tee, told re­porters last week. Given the high price tag of pay­ing for such a fix and the unique dilemma it presents to doc­tors, law­mak­ers be­lieve it would just be eas­ier to sep­a­rate the SGR from health­care re­form and ad­dress it on its own mer­its.

The rub, of course, is find­ing the re­sources to pay for such an over­haul. Stabenow claims her bill doesn’t have to be off­set, al­though the CBO has es­ti­mated her leg­is­la­tion would add $250 bil­lion to the fed­eral deficit, ar­gued Rep. Mike Pence (R-Ind.), chair­man of the House Repub­li­can Con­fer­ence, in an anal­y­sis of the SGR fix.

House Ma­jor­ity Leader Steny Hoyer (D-Md.) main­tains that the cost of the SGR fix in the House bill has al­ready been dealt with in the bud­get res­o­lu­tion ap­proved ear­lier this year. That mea­sure waived the SGR fix from fed­eral “paygo” rules, en­abling the fix to be payed for out of gen­eral rev­enue. How­ever, a fix would still add to the fed­eral deficit.

Rep. Michael Burgess (R-Texas), who has spon­sored health­care leg­is­la­tion to re­vamp the SGR, says there are bet­ter ways to pay for the SGR fix than let­ting its price tag be ab­sorbed by deficit spending, such as the money saved from med­i­cal li­a­bil­ity re­forms.

— with Matthew DoBias

Heim: Stabenow bill takes “SGR out of the pic­ture.”

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