2010-08-26
Adopting a 10-year Medicare payment fix for physicians would cost $330 billion, the Congressional Budget Office (CBO) – the primary congressional agency charged with reviewing congressional budgets and other legislative initiatives with budgetary implications – reported to Congress in a letter released August 25.
Under current law, payment rates for physicians' services will be reduced in December to about 21 percent below their 2009 level, with additional rate reductions taking effect in future years.
In a letter sent to Sen. Mike Crapo (R-Idaho), CBO said it had estimated that the cost of freezing Medicare physician payment rates at the 2009 level for six months during the second half of calendar year 2010 and allowing for an inflation update for 2011 through 2019 would carry a price tag of $278 billion.
But CBO said that estimate did not include the enactment of legislation modifying physician payment rates in 2010. The legislation increased physician payment rates by 2.2 percent for June through November of 2010, with an estimated cost of $6.3 billion over the 2010-2011 period.
Thus, the net cost of providing December 2010 payments at the 2009 level and allowing for an inflation update for 2011 through 2019 would be $272 billion, CBO stated.
However, legislation enacted during the remainder of this Congress would be assessed over the 2011 to 2020 period, rather than through 2019, CBO told Crapo. As a result, the estimated cost over the 2011-2020 period would be $330 billion, it said.
In June, Congress passed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (Pub. L. No. 111-192). The law canceled a 21 percent pay cut for doctors and replaced it with a 2.2 percent increase through the end of November.
Passage of the physician payment bill by Congress ended months of wrangling over the issue, as lawmakers enacted a series of one-month fixes and considered a 19-month fix before settling on a six-month fix that was paid for in part by other Medicare policy.
While the cancellation of the cut brought sighs of relief from physicians, they and other stakeholders said the new law provides only temporary relief from a problem that has been festering for almost a decade, with no ultimate relief in sight.
Since the law expires November 30, 2010, lawmakers may be forced to revisit the issue in a “lame-duck” session following a likely volatile congressional midterm election, making the next step on reforming the payment system difficult to predict.
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