Debated and despised, the Medicare physician payment formula may finally be on the way out – at least that’s what AMA President Ardis Hoven believes.
Known as the “sustainable growth rate” or SGR, the formula routinely threatens double-digit payment reduction to doctors until Congress steps in at the last minute to stop the cuts. Currently a 25 percent cut looms Jan. 1 unless Congress takes action again.
An admitted optimist, Hoven says she sees plenty of evidence to support her view that Congress is prepared to pass a permanent SGR fix this year. The AMA president points to wide bipartisan support in both chambers. She notes that the House Energy and Commerce Committee passed SGR legislation before the August break — well before the usual end-of-the-year scramble that has been the usual path to a short-term SGR fix. The House Ways and Means and Senate Finance panels are also actively working on a solution. “This is different. This is palpably different,” Hoven says in an interview.
According to the Congressional Budget Office, replacing the SGR would cost about $140 billion, down from earlier estimates as high as $300 billion. But in this era of deficit reduction, it’s unclear where Congress can find that much cash for anything, let alone to pay for the doc fix.
Expect a big battle if lawmakers, as they have in the past, turn to other Medicare providers, such as hospitals, home health companies or nursing homes, to accept less in Medicare reimbursements to finance a fix. In addition, Democrats will fight efforts to ask beneficiaries to pay more, such as imposing a co-payment for home health care services.
If and when Congress takes action on the SGR, some analysts have speculated that a fix will be part of a larger legislative package, perhaps as part of a debt ceiling deal this fall. But since the committees of jurisdiction are at different stages of development on their SGR plans, that time frame might not work.
Eventually, though, Congress will pass an SGR fix this year, Hoven says. “It’s the most logical thing in the world.”
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communications organization not affiliated with Kaiser Permanente.