04:41am Tuesday 19 November 2019

Legislation Raising the Federal Debt Ceiling May Lead to Five-Year Medicare Physician Payment “Fix”

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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