2010-02-02
On January 28, the Senate passed HJ Resolution 45, a resolution to raise the federal debt limit, and included in
the resolution a way to address the Medicare physician payment problem. The resolution requires that any new federal
spending or tax cuts be offset by corresponding spending cuts or tax
increases. However, under a deal
developed by the Senate Democratic leadership, the resolution makes certain exemptions
from these rules, including one for addressing the Medicare physician payment
cuts mandated by the sustainable growth rate (SGR) formula.
The SGR is a statutory formula that sets
overall targets in order to hold down spending on Medicare Part B physician
services. Payment rates are adjusted every year to reflect differences between
actual spending and the target. Since
2002, spending has exceeded the target, resulting in payment cuts. Beginning in
2003, Congress has implemented temporary measures to avert the cuts. Currently, Congress has instituted a temporary
freeze of Medicare physician payment to avert a scheduled payment cut of 21 percent
that was to begin on January 1, 2010. Because this freeze is set to expire at
the end of February, Congress is again racing to come up with a fix to the
problem. While many in Congress
generally support the idea of repealing the flawed SGR formula and establishing
a new foundation for physician payment, they do not agree on how to find the
hundreds of billions of dollars needed to make a permanent change in the
payment formula.
The SGR exemption in HJ Resolution 45 would allow up to
$82 billion in spending for an SGR fix that would not be required to be offset
by other revenue or cuts and assumes a five-year freeze of
the SGR with larger payment cuts and a higher cost after 2014. The exemption does not implement new
Medicare physician payment policy or provide enough funding for a truly
permanent fix. Rather, the Senate-passed maneuver would provide a
financial pathway to a temporary SGR fix and a mechanism to address the
immediate problem of a 21 percent cut beginning March 1, 2010.
The House of Representatives is
scheduled to vote on HJ Resolution 45 this week. If HJ Resolution 45 is passed by the House, Congress will still
need to enact separate legislation to stop the SGR cuts prior to March 1,
2010.
ASH recognizes that freezing physician payments
for five years is not acceptable or sustainable by physician practices and will
continue to advocate for a permanent repeal of the SGR and prevention of the 21
percent payment cut on March 1.
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