For many years Congress has avoided dealing with a nagging problem that has plauged Medicare and physicians – the SGR or sustainable growth rate formula. It is a complex formula by which CMS (Centers for Medicare/Medicaid Services) comes up with an adjustment factor for the Medicare fee schedule. Over the past decade Congress has had to override the SGR calculation repeatedly due to the fact that the formula is hopelessly flawed and using it would have resulted in major cuts in Medicare reimbursement to physicians and other providers. As Medicare payments are historically low, generally around 30-40% of traditional fee for service charges, cuts of those magnitudes would like have forced many physicians to opt out of the Medicare program all together. The net result would be to limit access of Medicare beneficiaries by shrinking the pool of providers who would accept Medicare patients.
Now it appears that Congress will address this issue head on. Perhaps this is a carrot from the Democratic leadership to the AMA for supporting the various health reform initiatives, perhaps it is just coincidence. Regardless of the reasons or timing, a fix is long overdue. Both physicians and the Medicare beneificiares who rely on them will benefit and Congress and the President are doing the right thing by dealing with this now . . . obi jo and jomaxx
Senate to vote on SGR Monday
Sen. Debbie Stabenow (D-Mich.) introduced S. 1776, the “Medicare Physicians Fairness Act of 2009,” which the Senate leadership announced yesterday will serve as the Senate legislative vehicle for eliminating Medicare’s sustainable growth rate (SGR) formula and laying the foundation for establishing a new Medicare physician payment update system. S. 1776 will be the subject of a cloture vote on Monday, Oct 19. The Senate needs 60 votes to invoke cloture to allow formal consideration of the bill. A vote on final passage is expected to occur late next week, either on Oct. 22 or 23. Senate Majority Leader Harry Reid (D-Nev.), Senate Finance Committee chairman Max Baucus (D-Mont.), and Sen. Chris Dodd (D-Conn.), along with President Barack Obama, are all strongly supporting passage of S. 1776.
Sen. Stabenow’s 18-line bill repeals the SGR formula and eliminates all debt that has been accumulated under the current payment system, setting future physician payment updates at zero. Importantly, the Senate leadership made it very clear yesterday that Congress does not intend to implement a permanent physician payment freeze and call it Medicare payment reform. Rather, by passing a separate bill that repeals the SGR and eliminates the accumulated spending target debt, budget constraints will be eased, allowing a new physician payment update system to be incorporated into a broader health system reform bill. The details of that future update system have not yet been worked out, although certainly the two spending targets that would be created by the U.S. House of Representatives health system reform legislation, H.R. 3200, could be viewed as a starting point.
The procedural path for passing S. 1776 will be complicated, requiring the support of 60 senators on several procedural motions over the next few days. Furthermore, because the legislation is not offset by other spending cuts or revenue increases it will add to the federal budget deficit, raising its controversy and making supporting votes difficult for some senators. Repealing the SGR is one policy objective that is a common goal for all physicians. Sen. Stabenow’s bill creates the pathway to finally achieve that goal.
S.1776 – http://www.opencongress.org/bill/111-s1776/show
The Medicare SGR Formula: The Edge of the Cliff is Approaching Fast – http://www.dcmsonline.org/jax-medicine/2005journals/PainManagement/editorial.pdf
Estimated Sustainable Growth Rate and Conversion Factor, for Medicare Payments to Physicians in 2009 – http://www.cms.hhs.gov/SustainableGRatesConFact/Downloads/sgr2009f.pdf
AMA Medicare campaign kicks-off with new TV ads – http://www.ama-assn.org/ama/pub/health-system-reform/medicare-physicians-fairness-act.shtml
Broken Medicare physician payment formula hurts seniors access and choice of physician – http://www.ama-assn.org/ama/pub/health-system-reform/medicare-physicians-fairness-act.shtml
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As a physician, I’d like a solution to the absurd perennial Medicare cuts. However, where will the $250 billion dollars come from? At present, it won’t come from anywere, but will just be dumped onto the deficit. While this proposal serves my interest, does it serve the public interest? The AMA, a supporter of the proposal, has lost membership and influence over the years, and for good reason.
http://www.MDWhistleblower.blogspot.com
On balance, we fully agree. However, this problem pre-dated any of the recent issues. Since our government is incompetent, and is willing to lay out taxpayers money to bail out financial, banking and auto companies, it seems that they can address a problem that should have been dealt with a decade ago. Citizenship seems to have taken a back seat to political whim in Washington DC. Sadly, we can only hope for the day when fiscal common sense will return to our nation. Thanks for the thoughtful comment.