10-Month Medicare 'Doc Fix' Passes House


February 17, 2012

February 17, 2012 — By a vote of 293 to 132, the US House of Representatives today approved legislation that delays a massive reduction in Medicare pay to physicians from March 1 to January 1, 2013. The Senate is expected to take up the bill and pass it as early as this afternoon.

In addition to averting the 27.4% Medicare pay cut set for March 1, the bill also extends a temporary cut to the Social Security payroll tax paid by workers through 2012 and continues unemployment compensation benefits for the long-term jobless.

The latest "doc fix" for the Medicare reimbursement crisis seems to leave everyone unhappy, especially physicians.

Rep. Phil Gingrey

Rep. Phil Gingrey, MD (R-GA), cochair of the GOP Doctors Caucus in the House, said he had to "hold his nose" to support the bill.

"It's just woefully inadequate," Dr. Gingrey told Medscape Medical News. "We're just delaying the inevitable."

Dr. Gingrey, along with organized medicine, said Congress should have ended the crisis for good by permanently repealing Medicare's sustainable growth rate (SGR) formula for calculating physician reimbursement — the reason for the looming pay cut. In lieu of a permanent fix, Dr. Gingrey and others had hoped that Congress would delay the cut for at least 2 years, as opposed to settling for a 10-month "patch."

Instead, Congress will have to return to the SGR issue later this year to avert an even larger Medicare pay cut, estimated to top 30%, on January 1, 2013. Dr. Gingrey does not expect lawmakers to muster enough gumption to repeal the SGR in an election year, or in a lame-duck Congress following the November 6 general election.

"I don't think that will happen," he said. "We'll have a very full plate during the lame-duck session, and we'll probably spend 5 or 6 weeks after the election trying to once again get past December 31 [with] another patch."

"I'm almost bitterly disappointed."

The American Medical Association (AMA) and other medical societies all chose the expression "deeply disappointed" in their responses to the bill passed by the House today. "Congress had an opportunity to permanently end this problem, which is the sound, fiscally prudent policy choice," said AMA President Peter Carmel, MD.

Dr. Carmel and others warn that postponing a repeal of the SGR formula only makes it more expensive. Earlier this year, the Congressional Budget Office (CBO) estimated that eliminating the formula and freezing Medicare rates for 10 years would cost $316 billion. Delaying repeal for another 10 months would add some $25 billion to the tab, according to Dr. Carmel.

Controversial Offsets Affect Hospitals, Public Health

Another reason why today's House bill has left a bad taste in people's mouths is how it is paid for.

According the CBO, the cost of delaying the scheduled Medicare pay cut for 10 months is $18 billion. To help offset this and other expenditures in the bill, lawmakers reduced federal payments to hospitals. Under the bill, over the course of 11 years they would receive $7 billion less in Medicare funds that make up for unpaid deductibles and copayments owed by patients. Hospitals that serve a disproportionate number of low-income patients also would receive $4.1 billion less in Medicaid payments.

Not surprisingly, the American Hospital Association has registered its protest.

"While we support ensuring that physicians will not see their Medicare payments reduced, we are extremely disappointed that once again Congress is putting senior's access to hospital services in jeopardy through arbitrary reductions to hospitals," said AHA President and Chief Executive Officer Rich Umbdenstock.

Another controversial offset in the bill is a $5 billion reduction over 11 years for the Prevention and Public Health Fund created by the Affordable Care Act. Republican lawmakers believe the fund gives the US Department of Health and Human Services freedom to spend large sums without Congressional oversight.

The Association of State and Territorial Health Officials (ASTHO) calls this budget call short-sighted.

"Unless we control the costs of healthcare through proven public health prevention programs, which result in a healthier and more productive workforce, we will not lessen the burden of health care costs on our nation's economy," ASTHO stated in a press release.


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