2010-01-27
It continues to remain unclear how Congress will fix Medicare physician
payment when the temporary physician payment freeze Congress implemented to
prevent a 21 percent Medicare physician fee cut expires February 28, 2010. The deadline had originally been January 1,
but a two-month extension was included in a Defense spending bill to give
lawmakers time to come up with a solution.
The payment cut is mandated by what is known as the sustainable growth
rate formula (SGR) – a formula that sets overall targets in order to hold
down spending on Medicare Part B physician services. Payment rates are adjusted every year to
reflect differences between actual spending and the target. Since 2002, spending has exceeded the target,
resulting in payment cuts; beginning in 2003, Congress has implemented
temporary measures to avert the cuts.
The physician community, the American Association of Retired Persons, and the Military
Officers Association of America have joined together to urge Congress to
repeal the flawed SGR formula and establish a new foundation for physician
payment. While many in Congress
generally support this effort, they do not agree on how to find the hundreds of
billions of dollars needed to make a permanent change in the payment
formula. As the deadline for the latest
temporary fix grows near, Congress is once again debating how to address the
issue.
A House-passed bill (HR 3961) that would make a permanent fix at a cost
of $210 billion over 10 years has been placed on the Senate calendar. It is not clear, however, if any Senator
would block consideration of this bill.
While the Senate leadership has indicated commitment to finding a
permanent fix, it continues to examine a range of policy options to meet that
goal.
Another
option under consideration by the Obama administration and Democratic leaders would
be to include the “doc fix” in debt limit legislation. This option would involve agreeing to a plan
to prevent cuts in Medicare payments to physicians that would be exempt from
finding an offset for five years.
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