Pay Attention to the Latest ‘Doc-Fix’ Proposal

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

Max Baucus (D-MT) speaks at a Senate Finance Committee meeting on March 20, 2007.
National Journal
Clara Ritger
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Clara Ritger
Oct. 31, 2013, 1:25 p.m.

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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