Posts Tagged ‘SGR’

Supercommittee’s failure leaves little time to avert Medicare cut

You’ve probably heard by now that the Joint Select Committee on Deficit Reduction, the “supercommittee,” failed in its efforts to reach a budget compromise. The 12 congressional lawmakers had until Thanksgiving to formulate a plan to trim at least $1.2 trillion in federal spending, and health care advocates hoped they’d also include a fix for the flawed Medicare payment formula, the SGR, in this plan.

This wasn’t wishful thinking; years of temporary fixes weigh heavily on the deficit. Plus, the committee had been granted special authorization to find and score savings wherever they could. Up until this point, insiders promised that committee members were seriously considering including an SGR fix, which would prevent a planned 27.4-percent cut in Medicare physician payment come Jan. 1. Not only is this cut still on the table, automatic reductions triggered by the supercommittee’s inaction will cut another 2 percent in Medicare payment in 2013.

A health care lobbyist told the Associated Press that “lawmakers of both parties wanted to deal with the cuts to doctors, but a fundamental partisan divide over tax increases blocked progress of any kind.”

In failing to act, they have “condemned millions of elderly and disabled Americans to continued health insecurity,” said AAFP President Glen R. Stream, M.D., M.B.I., in a statement. “This is no way to address the federal budget deficit. Nor is it the way to serve their constituents. Allowing the Medicare physician payment issue to fester worsens the health insecurity of millions of elderly patients and military families.” Read the full statement here.

With a little more than a month to go before the end of the year, there’s still time to pass another one- or two-year “doc fix,” and entering the 2012 campaign season, a short-term patch has wide support among Congressional lawmakers. But the question remains whether Congress as a whole can overcome the same gridlock that paralyzed the supercommittee.

Share

Developments in Medicare physician pay…plus the backup plan

Now that the 12 members of the Joint Select Committee on Deficit Reduction have begun meeting to develop a plan to trim at least $1.2 trillion in federal spending, advocacy groups and politicos have ramped up their effort to influence what goes on to and what stays off of the chopping block.

Since our last blog post, AAFP has taken significant steps to encourage the supercommittee to avoid making damaging cuts to Medicare and graduate medical education. AAFP met with representatives from seven medical societies and seven professional organizations on Sept. 7 to develop a unified strategy for the house of medicine, with AAFP still holding strong to the position that the SGR should be repealed or, barring that, the committee should enact a five-year Medicare payment fix that includes a 3-percent higher payment rate for primary care physicians.

During this week’s Congress of Delegates meeting, AAFP launched a grassroots campaign that calls for AAFP Delegates and other members to send a letter to their Congressional representatives asking for immediate repeal of the SGR. AAFP already sent its own letter to the “super 12” on Aug. 10 outlining its asks, and the 12 AAFP state chapters in which a supercommittee member lives requested meetings with their super person during the Congressional recess that extended through Labor Day. Texas is, of course, home to committee co-chair U.S. Rep. Jeb Hensarling, and Doug Curran, M.D., TAFP past president, current TMA board member, and constituent from Athens, has a meeting scheduled with the representative in the next couple of weeks.

Additionally, AAFP Board Chair Roland Goertz, M.D., M.B.A., of Waco said in an interview with Family Practice News digital network that the Academy will produce videos featuring “real family physicians who describe the real impact of these cuts for their practices,” in the hope that the videos go viral and incite larger action.

Most important, Goertz told AAFP members in the FPN video interview that physicians need to step up and take action. “Don’t go to sleep on this issue. We’ve been fighting this for 10 years. Don’t get fatigued about contacting those who represent you.”

“This is a big, big deal. A 29.5-percent cut in a payer source, particularly in Medicare, is going to put some practices out of business in some locations. So mobilize yourself, contact your elected officials, and if you feel comfortable with it, make sure you involve your patients because your patients are going to be the ones who unfortunately will suffer the outcomes.”

AAFP and other experts have acknowledged that the supercommittee may not address the SGR in their budget plan – because once again it may be too big an issue to tackle along with all of the other considerations. Hence, AAFP’s request for a five-year fix and 3-percent pay bump for primary care.

Another SGR-replacement idea released recently by the Medicare Payment Advisory Commission would implement a 10-year fix at a cost of around $200 billion. Though MedPAC’s plan would just replace one form of automatic payment cuts with different automatic payment cuts, it does include protections for primary care.

Kaiser Health News reports on their blog: “Reimbursements for primary care physicians would be frozen for 10 years, and specialists would see a reduction in payments for three years, at which time their rates would also be frozen.”

As Goertz said in an interview with AAFP News Now, “This is a game in evolution, and there are going to be some twists and turns.”

Hang on.

Share

Déjà vu all over again, the Medicare physician fee debate is back

Last month’s debate on the U.S. debt ceiling brought to light the ugly side of how we finance the nation’s operations, and as lawmakers move forward on a deal to reduce the deficit, they will inevitably turn their eyes to one of the country’s biggest expenses: Medicare. Federal spending for fiscal year 2010 totaled $3.5 trillion and Medicare comprised 15 percent of the total amount.

However, with crisis comes opportunity and a convergence of factors may make this the time to address a structural deficit in how the country pays physicians and other providers for the services they provide to Medicare beneficiaries.

Under the debt deal, a 12-member joint committee has until Thanksgiving to formulate a plan to cut at least $1.2 trillion in spending over the next 10 years. Then, recommendations made by the so-called “supercommittee” must go before Congress and pass by a simple majority in both chambers by Christmas. If the committee can’t agree on cuts or Congress fails to pass them, a series of across-the-board reductions would be triggered. One cuts pay to Medicare providers by up to 2 percent starting in 2013, which experts estimate would add up to around $12 billion.

While a reduction of any amount hurts, there is a bigger problem on the horizon: the Medicare physician payment formula, known as the Sustainable Growth Rate or SGR. Under the SGR, a across-the-board 29.5-percent cut would take effect on Jan. 1, 2012.

Every congressional budget cycle since 1997 has included a reduction in Medicare payments that has eventually been modified. Since 2002, Congress has stepped in 12 times to stop the cut, including four times last year. And each year that Congress provides a temporary patch, the price tag gets steeper. According to the AMA, if Congress were to wait until 2016 to eliminate the SGR, the combined price of providing temporary patches and fixing the structural problem would approach $600 billion.

Now it boils down to deficit reduction; if Congress doesn’t address the broken SGR in some way, it will continue adding to the deficit. This gives the argument to repeal the SGR strength it hasn’t had in previous years.

The real value of the supercommittee is that there are no restrictions on what they can recommend to cut or how it scores savings; its jurisdiction gives the 12 members the ability to find offsets for other spending in all areas of government. By virtue of normal committee jurisdiction, fixing the SGR—a Medicare Part B issue—would usually mean finding offsets only within Medicare Part B, and that hasn’t been possible without hurting the program. Similarly, the supercommittee could recommend federal medical liability reform and score those savings toward deficit reduction.  

Late last month, the American Medical Association and 10 specialty societies (including AAFP) sent a video to Congress on the need for full repeal of Medicare’s flawed Sustainable Growth Rate formula. At just over two minutes long, a combination of text and eerie techno-classical music sets the scene: “By acting now, Congress can preserve access to care for people on Medicare and reduce Medicare spending by hundreds of billions of dollars. Or it can put off a solution…again.” Weaving through charts and graphs, they make the golden deficit-reduction argument, ending with the final statement: “Stop digging the hole. Pay the bill. Repeal the SGR.”

[Can’t see the embedded video above? View here: http://youtu.be/jNmuyZWi3qc]

The AMA proposes a three-pronged approach: repeal the SGR; provide five years of stable payments with positive annual updates; and transition to a broad array of payment and delivery innovations.

AAFP outlined similar asks in a letter sent to supercommittee members last week. First, stabilize Medicare payments to physicians by repealing the SGR, and specify a payment rate for the next 3 to 5 years with a 3-percent higher rate for primary care physicians delivering primary care services. Second, avoid making reductions in Graduate Medical Education, especially GME payments for primary care education and training, to protect the physician workforce.

Share
ASSA Flickr Stream

Error: Twitter did not respond. Please wait a few minutes and refresh this page.