Weigh­ing the costs

Re­peal of SGR would mean big cuts else­where

Modern Healthcare - - THE WEEK IN HEALTHCARE - Rich Daly

The grow­ing push by provider groups for con­gres­sional re­peal of Medi­care’s physi­cian pay­ment for­mula ran into the harsh re­al­ity last week of what pay­ing for that change could mean for the rest of the pro­gram.

The steady drum­beat of provider or­ga­ni­za­tions urg­ing re­peal of Medi­care’s sus­tain­able growth-rate for­mula by the Joint Se­lect Com­mit­tee on Deficit Re­duc­tion—charged with find­ing $1.2 tril­lion worth of 10-year deficit re­duc­tions—cul­mi­nated in an Oct. 6 let­ter from 113 mem­bers of the House of Rep­re­sen­ta­tives.

“We urge you to in­clude a full re­peal of the SGR, to sta­bi­lize cur­rent pay­ment rates to en­sure ben­e­fi­ciary ac­cess in the near term, and set out a clear path to­ward com­pre­hen­sive pay­ment re­form,” wrote the mem­bers of Congress, led by Rep. Allyson Schwartz (D-Pa.), to the su­per­com­mit­tee.

That con­gres­sional mis­sive fol­lowed weeks of sim­i­lar let­ters to the panel from provider ad­vo­cates, in­clud­ing one the week be­fore from the Amer­i­can Academy of Fam­ily Physi­cians, which also launched a national grass­roots cam­paign to push for that.

But a com­mon de­nom­i­na­tor in the ap­peals from mem­bers of Congress and from many provider groups was the lack of broadly sup­ported ways the deficit group could off­set the costly re­peal. The off­sets are crit­i­cal be­cause un­der­tak­ing the $300 bil­lion, 10-year re­peal of the SGR would com­pli­cate the su­per­com­mit­tee’s dif­fi­cult task by ef­fec­tively in­creas­ing the to­tal sav­ings the panel would need to find.

Last week, the debt panel was handed a de­tailed way to pay for that costly change.

Ten years af­ter first call­ing for Congress to re­peal the SGR, the Medi­care Pay­ment Advi- sory Com­mis­sion ap­proved on Oct. 6 a first­time com­pre­hen­sive list of off­sets from within Medi­care to cover the cost of do­ing that. Un­for­tu­nately for MedPAC, the cuts are op­posed by ev­ery provider group that has taken a pub­lic po­si­tion on it.

The pro­posal, ap­proved 15-2, in­cludes a physi­cian com­po­nent—to re­duce the 10-year SGR cost by about $100 bil­lion—that would freeze Medi­care rates for most pri­mary-care physi­cian ser­vices while cut­ting other physi­cian ser­vices by 5.9% for three years and then freez­ing those rates for seven. The non­physi­cian sav­ings in the SGR re­place­ment plan— worth about $220 bil­lion in 10-year sav­ings— in­clude 34% from drug­mak­ers, 15% from ben­e­fi­cia­ries, 11% from hos­pi­tals and 6% from durable med­i­cal equip­ment cuts.

Although many of the mem­bers of the com­mis­sion were leery of the cuts they pro­posed, they por­trayed the spe­cific off­sets as part of their fidu­ciary duty to Congress and a way to spur con­gres­sional ac­tion on re­peal­ing and re­plac­ing the Medi­care physi­cian pay­ment for­mula. Sev­eral mem­bers said they hoped leg­is­la­tors ul­ti­mately would fund such changes through means out­side of MedPAC’s purview, such as through mal­prac­tice re­form.

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