Lawmakers Mull Long-Term Fix to Medicare Payment Formula
Congressional lawmakers later this month will begin discussing new proposals to delay a scheduled 21% cut in Medicare physician reimbursements and consider new ways to permanently fix the current payment formula, CQ HealthBeat reports.
Last month, Congress passed an extensions bill (HR 4851) that delayed the scheduled payment cuts until May 31. A second bill (HR 4213) that would delay the decision through September has been held up over legislative rules (Jenks, CQ HealthBeat, 5/3).
In addition, a bill passed by the House that would repeal the payment formula and increase payment rates has stalled in the Senate because of concerns over cost, CongressDaily reports (Cohn, CongressDaily, 5/3).
The current payment formula, known as the Sustainable Growth Rate formula, was approved in 1997 and originally intended to lower costs by annually resetting physician payment rates. However, Congress has repeatedly passed short-term fixes, offsetting the reductions to Medicare reimbursements (California Healthline, 11/20/09).
Senate and House Democratic leaders in recent days have expressed interest in a long-term fix to the formula, and aides in both chambers say that several options are under consideration, such as a five-year delay to the cuts or a shorter delay with higher payment rates.
House Democratic Congressional Campaign Committee Chair Chris Van Hollen (D-Md.) last week told the American Hospital Association that a five-year fix was a possibility and such a plan could be introduced soon.
Meanwhile, a Senate Democratic aide said that Senate Finance Committee Chair Max Baucus (D-Mont.) is committed to a long-term fix, and the House Ways and Means Committee still is considering a longer-term fix, even though it would require additional offsets (CongressDaily, 5/3).
The Congressional Budget Office on Friday released new estimates on the cost impact of adjusting the Medicare payment rates formula. According to CBO, delaying the 21% payment cut for five years and raising certain physician's fees would cost $88.5 billion. A 10-year freeze on the rate cuts would cost $275.8 billion over the period, according to CBO.
AMA Remains Critical of Congress' Efforts on Payment Fix
According to CongressDaily, the new CBO estimates "could be the final nail in the coffin" for the American Medical Association, which has been leading the effort to repeal the SGR.
AMA President James Rohack on Monday said costs will continue to rise if Congress continues to rely on short-term fixes to the formula.
Rohack on Monday said, "It's time for Congress to put aside the short-term actions that have more than quadrupled the price of a solution for American taxpayers and fix the problem once and for all for seniors, military families and their physicians" (Cohn, CongressDaily, 5/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.