Posted by Phillipa on May 7, 2010, at 13:53:22 [reposted on May 7, 2010, at 14:09:22 | original URL]
Just got update on the voting in Congress on the Health reform. So what you think? Phillipa
rom Medscape Medical News
Congress May Consider Multiyear Medicare Payment Fix Next Week
Robert LowesMay 7, 2010 After postponing a 21.2% cut in Medicare reimbursement to physicians 3 times since last December, Congress may consider a multiyear solution to the payment crisis as early as next week.
The massive cut will take effect June 1 unless lawmakers act to avert it beforehand. Organized medicine has repeatedly warned Congress that if the pay cut goes into effect, many physicians will stop seeing seniors and military families whose TRICARE coverage is based on the Medicare fee schedule.
The next postponement of the cut could be part of a larger bill extending tax breaks, as well as unemployment compensation benefits and subsidies for health insurance premiums under the COBRA program for out-of-work Americans.
Regan Lachapelle, deputy communications director for Senate Majority Leader Harry Reid (D-NV), told Medscape Medical News that the Senate may consider an extender bill as soon as it wraps up its deliberations on financial reform, which could happen next week. In addition, the online publication CongressDaily states that Democratic leaders want to bring extender legislation next week to the House floor. These predictions corroborate what several medical societies have heard about the Congressional timetable.
Instead of delaying the effective date of the pay cut by another month, or 6 months, as once contemplated, Congressional Democrats appear ready to enact a longer-term solution to Medicare reimbursement that may even include a raise for physicians. For its part, organized medicine has lobbied Congress for a permanent fix namely, a repeal of the sustainable growth rate (SGR) formula that Medicare uses to calculate physician pay.
One credible signal of a multiyear fix in the works surfaced last month in a speech that Rep. Chris Van Hollen (D-MD) gave at the annual membership meeting of the American Hospital Association. "If we can't get a permanent fix, at the very least we hope to enact a 5-year fix, which would be better than a month-to-month or a year-to-year approach...as we then look forward to a permanent fix," Rep. Van Hollen said.
Kevin Burke, director of governmental relations for the American Academy of Family Physicians, said Rep. Van Hollen's comments hold some weight.
"[Van Hollen] is in the House leadership," Burke told Medscape Medical News. "He's probably keyed into what he's talking about."
Congress Has Laid Groundwork for Multiyear Solution
The proposal for a 5-year fix is not exactly new. It was born earlier this year when Congress voted to raise the federal debt ceiling. One provision of that legislation, known as "pay-as-you-go" or "pay-go," forces lawmakers to make their spending and tax cut proposals budget-neutral. So if a piece of legislation costs $50 billion, they have to offset the cost by cutting the budget elsewhere or raising taxes.
However, this legislation also exempts the equivalent of a 5-year freeze of Medicare rates from the pay-go rule, meaning that Congress could finance the freeze through deficit spending. The Congressional Budget Office (CBO) puts the cost of a 5-year freeze at $89 billion.
Kevin Burke of the American Academy of Family Physicians said Congressional Democrats intend to spend their exempted $89 billion, but probably for something other than a 5-year freeze.
"A freeze hardly makes for a payment schedule that physicians can be comfortable with," he said. Democrats are more likely to use the money to finance a small Medicare raise over 2 or 3 years, perhaps in keeping with Medicare payment legislation passed by the House last year (similar legislation fizzled in the Senate). The price of their solution could go above $89 billion, said Burke, if Democrats can find budget cuts or tax hikes called "pay-for's" in the halls of Congress to offset the additional funds, pay-go style.
5-Year Freeze Would Be Followed by Catastrophic "Cliff"
At the center of the Medicare reimbursement crisis is the SGR formula, which sets an annual target for Medicare spending on physician services based partly on the growth of the gross domestic product (GDP). If actual spending exceeds the target, Medicare is supposed to decrease physician pay the next year to recoup the difference. Organized medicine contends that the formula is unfair to physicians because their practice costs are growing at a faster rate than the GDP. Some physicians would rather see Medicare pay pegged to medical practice inflation, as measured by the government's Medicare Economic Index.
Congress has canceled annual SGR-triggered cuts going back to 2003, but the difference between actual and targeted spending on physician services has continued to mount year by year, resulting in the 21.2% decrease for 2010.
The pay cut was originally set to take effect January 1, but Congress pushed back the date to March 1. Lawmakers postponed the cut again to April 1, and then to June 1, as part of bills that extended unemployment compensation and COBRA subsidies. Those 2 bills won passage only after staunch resistance from Senate Republicans, who argued that Democrats should find pay-for's for their legislation instead of adding to the federal deficit.
A similar showdown could be shaping up in the latest round of what lawmakers call "the doc fix."
"In the Senate, the Republicans are already raising issues about the extender bill," said Kristen Hedstrom, assistant director of legislative affairs for the American College of Surgeons, adding: "Pay-for's are harder to find. The healthcare reform bill has already used up many of them."
The cost of a 5-year pay freeze or a modest raise over several years pales in comparison with more drastic solutions to the SGR problem. Keeping Medicare rates flat from 2011 through 2020 would cost $276 billion, according to CBO figures released last week. Basing Medicare pay during this period on the Medicare Economic Index which would be more generous boosts the cost to $330 billion.
Anything short of repealing the SGR merely delays the day of reckoning, however. The CBO estimates that if Congress enacted a pay freeze from 2010 through 2014 while preserving the SGR formula, physicians would face a 30% pay cut in 2015 a fiscal shock that it calls a "cliff." Again, the gap between actual and targeted spending on physician services continues to accumulate in this scenario, meaning that Medicare must reduce physician pay all the more to eliminate the deficit.
Organized Medicine Trying to Rally Public Support
While the Congressional countdown to June 1 is underway, organized medicine is attempting to collect 1 million signatures on a petition urging Congress to permanently solve the Medicare reimbursement crisis. Some 67,000 people had signed it as of yesterday.
"Please fix Medicare" the petition reads, "by developing a rational Medicare physician payment system that automatically keeps up with the cost of running a practice and is backed by a fair, stable funding formula."
The petition's chief sponsor is the Texas Medical Society. State medical societies and many specialty societies have joined the cause en masse, although the names of some prominent societies are missing from the list, including the American Medical Association, the American College of Physicians, the American Academy of Family Physicians, and the American College of Surgeons.
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