Tuesday, October 20, 2009

Congress considering fix to Medicare payment formula

It looks like the flawed Medicare payment system is finally getting some serious attention.

Senate Democrats are planning a vote soon on a bill that would permanently eliminate the sustainable growth rate (SGR), the formula used to determine Medicare payment rates. As you probably know all too well, that formula has and will continue to threaten payment cuts each year. Congress usually steps in at the last minute to reverse the cuts, but a 21 percent cut was looming for 2010, and there has yet to be a permanent fix.
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The bill, introduced last week by Sen. Debbie Stabenow (D-Mich.) and separate from the main three health reform bills, would reset the SGR to zero for 2010 and beyond. This basically means it erases the $245 billion debt accumulated from last-minute fixes to avoid deep payment cuts, according to MedPage Today.

Among the major healthcare reform bills being worked out in Congress, the House bill scraps the SGR and later replaces it with the Medicare Economic Index, and the Senate Finance bill fixes it for just one year. That accounts for some of the cost difference between the bills.

The AMA, which supports the bill, launched a campaign last week including a television ad. “Congress can no longer put a band-aid on the problem,” AMA President J. James Rohack, MD, said in a statement.

But the cost (and the fact that the bill doesn’t really explain how to pay for the $245 billion) and the speed (it’s scheduled for a quick floor vote) has made some skeptical about this solution to the Medicare payment system.

So perhaps there are better ways to fix the SGR, but at least it's getting some real attention in Washington.


  1. They have to fix the medicare payments. Physicians are limitinig their practice to fewer Medicare patients. The reimbursement does not cover the cost.

  2. Well, we might have spoken too soon.

    From the NYTimes this morning:

    "In the face of solid Republican opposition, Senate Democrats on Tuesday backed down from their effort to increase Medicare payments to doctors without offsetting any of the cost over the next 10 years. ...

    The Senate majority leader, Harry Reid, Democrat of Nevada, had hoped to whisk the Medicare bill through the Senate this week, before taking up a much larger bill to provide health insurance to nearly 30 million Americans.

    But Republicans had other ideas, and so did some moderate and conservative Democrats. They said they could not swallow the Medicare bill because it would cost $247 billion over 10 years and none of the cost would be offset or paid for. ...

    Republicans support the goal, but want to pay for it."