All aboard the last train, see you next year on Medicare SGR
Congress appears poised to pass yet another patch to Medicare’s unpopular sustainable growth-rate formula for physician payments despite fervent opposition from the American Medical Association, its allies and others.
That would set up another SGR crisis next year, frustrating physician groups that felt closer than ever to permanently resolving the problem.
Monday afternoon, the Senate is expected to consider the 12-month patch, which the House approved Thursday. Opponents seeking permanent repeal lobbied over the weekend to rally opposition. But Hill watchers assume senators, even those opposed to a temporary patch, will pass the measure rather than face the quagmire of how to pay for a permanent fix.
The one-year patch surfaced at the eleventh hour after legislators failed to reach agreement on paying for physician payment reform, at a cost of at least $138 billion over a decade. Without a new patch or a permanent solution, doctors face a potential 24% cut in Medicare payments April 1. The patch would be paid for through a budget gimmick extending Medicare sequester cuts beyond the 10-year window used for budget scoring purposes and through coding changes lowering physician payments.
The deal was cobbled together by House Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) to the chagrin of many of their own caucus members. It emerged as part of a Christmas tree bill with a variety of major, unrelated healthcare provisions that pleased some and angered others. Winners seemed to be hospitals in non-Medicaid expansion states and healthcare organizations that weren’t ready to implement the complex new ICD-10 coding system on Oct. 1.
Provisions in the bill include a six-month partial enforcement delay for the controversial two-midnight payment rule for hospitals, and a one-year delay in Medicaid cuts to hospitals that serve a disproportionate number of poor people. That was welcome news for hospitals in states that haven’t expanded Medicaid. The bill also postponed implementation of ICD-10 coding for at least a year past its scheduled Oct. 1 start. The delay in what could be a rocky transition to the new coding system may turn out to be a break for Democrats running for election in November.
“This is likely to be the last train out of town on Medicare changes for a while,” said Chip Kahn, president and CEO of the Federation of American Hospitals. “That’s why this was a train that had a lot of cars between the engine and the caboose.”
With opposition surfacing among House Republicans, GOP leaders rushed the bill through on a voice vote with no roll call, when few members were on the floor. That gambit left members bewildered or irate, but it moved the bill on to the Senate.
Then attention turned to new Senate Finance Chairman Ron Wyden (D-Ore.), who blasted the temporary SGR patch and was expected to bring forth his own proposal for a permanent fix, likely paid for with Overseas Contingency Operations funds. But with little chance of that funding option receiving House GOP support, observers expected Wyden to bow to the inevitability of another SGR patch.
“It’s kind of like the stages of grief,” said Dean Rosen, a partner at the lobbying firm of Mehlman Vogel Castagnetti and a former top GOP staffer on healthcare issues. “You have to go through them to get to the end.”