Dec ‘11
16
Lost In Translation – The Medicare Physician “Fix”
Somewhere in the polarized policy making process that passes for Congress today is a long-term problem that won’t go away while Congress pretends it doesn’t exist. Back in 1997, the Republican House passed a Balanced Budget Act designed to change the way physicians are paid for services provided Medicare beneficiaries. The Sustainable Growth Rate (SGR) limited per service pay increases to the annual percentage increase in Medicare Part B. Along with other Medicare payment provisions in BBA 97, the SGR was designed to limit federal spending in Medicare.
Unfortunately, it didn’t last long. Health care providers complained about having payments limited by inflation rather than the real costs to them of delivering services. And, as usual, many physicians simply prescribed more patient visits, diagnostics and the like, so as to make up for lost income. So every year Congress felt compelled to make up physician payment losses resulting from its own legislation or risk having providers pull out of Medicare. With Republicans in control of both Congress and the White House in 2003, instead of fixing the problem by changing the payment policy to encourage and reward more conservative practice patterns, Congress added to the problem and its costs by enacting Medicare benefit expansions like prescription drugs and Medicare Advantage.
The new health reform law, a.k.a. Obamacare, authorizes payment incentive changes to improve care quality and reduce excess utilization. Policies like Accountable Care Organizations, bundled payments and innovative payment projects. But Republicans insist on repealing these policies along with Obamacare and replacing them with Medicare Advantage for all and with a premium support tax subsidy the amount of which Congress can control.
In the meantime, American physicians are losing money every year seeing Medicare beneficiaries like me. So the House Republicans are proposing to add a provision to legislation which the president wants passed to extend the social security payroll tax reduction, which would increase Part B payments for this year and next by 1 percent at a total cost to taxpayers of $38.4 billion. If the change were permanent, it would cost $300 billion over 10 years. However, not all taxpayers. Despite the GOP pledge never to raise taxes on the wealthy, they propose to increase Medicare premiums for those earning more than a $1 million a year; to reduce the funds authorized for the Affordable Care Act (ACA) implementation, especially on preventive health, and to take big cuts out of hospital payments. By enough to help offset the $38.4 billion pay increase for doctors.
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