Nicole V. Baptista
Congress left for the Memorial Day break Friday, May 28, 2010, without passing legislation to postpone cuts to Medicare physician reimbursement. Their lack of action, which was highly criticized by physician organizations, has translated to a physician pay cut of 21% that took effect June 1. However, there is a chance for Congress to pass a short-term fix before physicians are affected by the cut.
For the third time this year, Congress has been unsuccessful in proposing and passing a long-term solution to the sustainable growth rate (SGR) problem that has persisted for the last seven years. The SGR formula, upon which physician Medicare reimbursements are based, was meant to ensure that whenever physician costs grew faster than the economy, physicians' Medicare reimbursements would be reduced. However, with the exception of one time in 2003, lawmakers have always intervened to delay these unpopular cuts.
While the US House of Representatives passed legislation on May 28 that would prevent cuts through 2011 and replace them with reimbursement increases, the Senate did not come to a consensus on this issue due to concerns about cost. According to a recent American Medical Association (AMA) newsletter, AMA President J. James Rohack, MD, stated “The Senate has turned its back on seniors, and America’s physicians are outraged that Congress has deserted patients by failing to address this year’s Medicare cut before the June 1 deadline.”
Physician organizations, including AMA, support a permanent repeal and are calling for an end to a seemingly never-ending cycle of temporary patches that will inevitably lead to larger reductions to physician payments. However, a multi-year plan or permanent repeal of SGR does not seem likely in light of the current $1.3 trillion budget deficit. Democrats who support repealing SGR find its $250 billion price tag hard to swallow because there are no corresponding plans to cut costs elsewhere or increase taxes.
At this point, there is still a chance for a short-term fix. While Congress is not in session, the Centers for Medicare & Medicaid Services will instruct contractors to hold June claims from physicians for 10 business days. If the Senate returns on June 7 and approves the House-passed 19-month legislation, physicians will receive a 2.2% raise for the rest of 2010 retroactive to June 1, followed by another 1% raise in 2011. However, physicians would receive a 33% cut in 2012 as the system reverts to the SGR formula baseline.