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Health Care

Pay Attention to the Latest 'Doc-Fix' Proposal

It might be the one health reform initiative both sides of the aisle can agree on.

Senate Finance Committee Chairman Max Baucus, D-Mont., is one of four legislators leading the charge to permanently fix Medicare's broken payment system.(Richard A. Bloom)

photo of Clara Ritger
October 31, 2013

Legislators on Thursday unveiled a bicameral, bipartisan proposal to repeal and replace the sustainable growth rate formula, which determines Medicare payments for physicians. One expert called it "above and beyond" anything else he's ever seen.

Julius Hobson, senior policy advisor at Polsinelli, a law firm in Washington, worked as a lobbyist for the American Medical Association in 1997.

"I didn't like [the SGR] then, and I've been lobbying to fix it ever since," Hobson said. "Until this year, Congress has never made a serious attempt to repeal SGR."

 

Each year, Congress throws together last-minute, Band-Aid solutions to Medicare's payment problem, popularly known as "doc-fix" bills.

"This year for the first time, there was a clear determination to do something about this," Hobson said. "They started in January."

The proposal carries the support of the House Ways and Means and Senate Finance committees.

"For years, Medicare payments to doctors have been at risk of being slashed, limiting seniors' access to high-quality care," said Senate Finance Committee Chairman Max Baucus, D-Mont. "Enough with the quick fixes. Our proposal is for a new physician-payment system that rewards value over volume. It will go a long way in improving the efficiency and quality of care for America's seniors."

It proposes a 10-year freeze of current payment levels, but physicians are able to get performance payments above the payment freeze. It also authorizes Health and Human Services to develop alternate payment models.

There is no Congressional Budget Office cost estimate—the proposal is currently in discussion draft and will be turned into a bill mid-November—but there are concerns with how Congress will fund the solution.

Chip Kahn, president of the Federation of American Hospitals, said he thinks the ideas are good, but that the ideas aren't what ultimately matters.

"The dark cloud that hangs over the legislation is the fiscal question," Kahn said. "How do you make it budget-neutral?"

Kahn said the hospitals have faced $95 billion in cuts since health reform passed, and worries Congress will "rob Peter to pay Paul" in the effort to solve Medicare's payment problem.

"My concern is that in order to achieve these laudable goals for physician payment reform, we may create a deeper fiscal cut for other providers," he said.

If the proposal doesn't gain traction, Congress would have to pass another short-term patch by the first of the year, or physician payments would be cut 24.4 percent.

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