Healthcare Business News

Lawmakers urged to spare hospitals in fixing SGR

By Jessica Zigmond
Posted: February 1, 2012 - 2:45 pm ET

Several hospital groups urged Congress to use savings from overseas operations as a way to solve Medicare's sustainable growth-rate formula for physicians—as long as those funds would provide for a full fix.

Organizations including the Federation of American Hospitals, the American Hospital Association, the Catholic Health Association of the United States, and the National Association of Public Hospitals and Health Systems sent a letter to members of Congress that again lobbied federal lawmakers to find a permanent solution to the way the Medicare program reimburses physicians that does not compromise funding to the nation's hospitals.

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“H.R. 3630 as passed by the House in December jeopardizes access to care for all patients by cutting more than $20 billion in hospital payments,” the groups noted in their Feb. 1 letter (PDF). “Cuts of this magnitude will mean fewer nurses, longer waits for emergency care and decreased access to new treatments,” it continued. “America's hospitals encourage you to look elsewhere to pay for changes to the sustainable growth rate (SGR), including looking at the Overseas Contingency Operations funds, so long as those funds cover the entire cost of the SGR fix.”

Also Wednesday, Douglas Elmendorf, director of the Congressional Budget Office, wrote a blog post about this issue because he said his office has received many requests about whether potential reductions in spending for operations overseas—such as U.S. military operations in Afghanistan—can be considered as offsets to reductions in taxes or additional spending for Medicare or other programs. It's a complex issue, he noted, primarily because Overseas Contingency Operations fall under discretionary spending, while Medicare is a mandatory program.

The correspondence came on the same day the conference committee to discuss long-term solutions to the SGR, a payroll tax holiday extension and unemployment insurance met for a second time. During and after that three-hour meeting, Democrat lawmakers cited the overseas funding as the way to address the SGR issue once and for all.

“I think if there is a permanent solution, we would have to use OCO,” Rep. Sander “Sandy” Levin (D-Mich.), a member of the conference committee and ranking member on the House Ways and Means Committee, said after the meeting, referring to Overseas Contingency Operations funds that are used to achieve national-security goals. “There's no other way. We're talking about hundreds of billions and I don't think anybody has any other alternative in mind. So when we talk about permanent, I think we would have to use those overseas funds.”

House Ways and Means Committee Chairman Dave Camp (R-Mich.), who led Wednesday's conference committee meeting, said he was “surprised” by the level of agreement among committee members to find a longer-term fix for the SGR, but he did not get into specifics on how lawmakers will pay for that solution.

“I'm not ready to talk about how we pay for policy,” Camp told reporters after the meeting. “I want to find out what the policy is and what we agree to. This was certainly a beginning ‘sounding' on where the conferees are on that issue, and there did seem to be some agreement, particularly on SGR, on doing something longer and more permanent,” he continued. “So then we have to evaluate that as we get later.”

The panel will meet again at 10:00 a.m. ET Thursday.

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