Despite bipartisan support, Congress is unlikely to pass a permanent “doc-fix” by the end of the year, according to an official in the House Ways and Means Committee. But lawmakers need to get a patch in place soon to prevent a 20 percent cut to physicians’ pay on Jan. 1.
While the goal within Congress is still a long-term fix, the official said, the reality is that the House will meet for four more days before adjourning until next year.
Just before the Thanksgiving holiday, the Centers for Medicare and Medicaid Services unveiled a 20 percent cut to 2014 doctor’s payments for Medicare services.
While the cut — and the time Congress has left to stop it — seems ominous, the likelihood of it happening is small. It’s a dance Congress does each year after CMS announces the cut, which a 1997 law required in order to keep federal spending in check with federal income.
Since 1992, the government has issued payments to physicians to cover the cost of care for Medicare beneficiaries. In 1997, CMS adopted the Sustainable Growth Rate formula, which helps limit federal spending on Medicare. It ensures the yearly increase in expenditures does not exceed GDP growth. As a result, physicians who receive reimbursements for services to Medicare patients have been subject to annual cuts, but each year Congress comes up with a “doc-fix” to raise payments, pushing the cuts back to be dealt with in future budget cycles. Congress has passed 15 “doc-fixes” since 2003, adding up to a grand total of $150 billion.
This year, a permanent repeal-and-replace solution gained traction on the Hill because the Congressional Budget Office estimated that it would cost $175.5 billion over 10 years, significantly lower than in previous years.
It is unclear whether delaying the permanent “doc-fix” until 2014 would affect that cost estimate.
Leading medical associations, however, say the cost is worth it given the long-term savings.
“If we eliminate the fiscally foolish SGR once and for all, it would cost less than all 15 of the previous patches that Congress has put in place over the last decade,” said Ardis Dee Hoven, president of the American Medical Association, in a press release. “At stake are innovations that would make Medicare more cost effective for current and future generations of seniors. Innovation requires stability and investment: investment in health information technology to help share information at the point of care, investment in staff to help coordinate care, and investment in time for physicians to consult with each other about a patient’s care.”
Hoven said they are optimistic that they’ll get SGR repeal this year, especially given the fact that legislators started working on it early, as opposed to other years when it was handled as a last-minute fix in the budget. But because Congress is facing a tight budget, it will have to look for how to offset the cost.
Hoven added that access to care could become “a real threat” if Medicare payment remains unstable and Congress doesn’t get a permanent solution done soon.
“One out of four Medicare patients is having difficulty finding a primary care physician in this country,” she said. “If in fact they fail to repeal [SGR], the stabilization of the Medicare program is at great risk.”
Members of the Senate Finance Committee are next expected to discuss the SGR overhaul Dec. 12. The legislation — sponsored by Committee Chairman Max Baucus, D-Mont. — will be released two days prior. The House Ways and Means Committee Chairman Dave Camp announced Thursday that if “real progress” continues on the bill, he expects the committee to mark it up next week.
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