In considering legislation to fix Medicare's troubled physician payment formula, House Democrats face two potential problems: lack of cooperation from the Senate if they do pass the bill and the wrath of doctors if they don't.
The House's SGR dilemma
Senate unlikely to cooperate on bill docs want badly
With a vote on their healthcare reform package out of the way, the physician lobby is counting on House lawmakers to succeed where the Senate recently failed—approving a bill that offers a permanent solution to Medicare's reimbursement formula (See related editorial, p. 20). If lawmakers don't deliver on this task, estimated to cost more than $200 billion over 10 years, they could lose the support of medical organizations on comprehensive reform.
“It will be very difficult for any physician organization to support larger reform” if lawmakers don't fix Medicare's physician payment system, said Anders Gilberg, vice president for public and private economic affairs at the Medical Group Management Association. Gilberg said that shoring up Medicare payments makes sense, since it's the system on which many private plans benchmark their contracts with doctors.
Medicare's physician payment is driven by a formula known as the sustainable-growth rate, or SGR, which is based on the economy's health, and has produced results that would have resulted in payment cuts to physicians every year since 2003. Congress has stepped in each time to enact a temporary fix so that doctors won't experience additional reductions to their Medicare payments, an approach that racks up additional costs and adds to the frustrations of doctors who want a permanent solution.
House Majority Leader Steny Hoyer (D-Md.) several weeks ago set a date of Nov. 16 for the House to begin consideration of the Medicare Physician Payment Reform Act of 2009, a measure that would prevent a scheduled 21.2% rate decrease set to take effect next year by revamping the SGR formula.
What the legislation would do is essentially “reset” expenditure targets on physician services every five years, which would “greatly reduce the potential for future cumulative deficits like those we've run up over six or seven years under the SGR,” Gilberg said.
In hailing passage of the larger health reform bill in the House Nov. 7, doctors made it clear they wanted to see swift action on the SGR fix. “The SGR physician payment cuts that are scheduled to go into effect on Jan. 1 are unacceptable and would have disastrous results in terms of patients' access to medical care,” said Gary Richter, president of the Medical Association of Georgia, in an e-mail. The Georgia association was one of the American Medical Association member groups that actively opposed the larger reform bill, going against the AMA's stance (Nov. 9, p. 8).
Senate lawmakers last month tried to act on a solution, but fell 13 votes short of approving a bill sponsored by Sen. Debbie Stabenow (D-Mich.) that would have eliminated the SGR formula, freezing physician payments for the next 10 years. Much of the criticism centered on the fact that the bill wasn't paid for with accompanying cuts.
Technically, the SGR legislation in the House isn't offset either. House lawmakers in their budget resolution earlier this year exempted the SGR fix from its “pay as you go” rules, meaning the bill's price tag—estimated at $210 billion over 10 years by the Congressional Budget Office—would be absorbed back into the federal budget baseline.
Medical societies, however, “seem fairly upbeat” the bill will clear the House, despite cost concerns, said Josh Cooper, senior director of government relations with the American College of Radiology.
One reason for optimism is that the chamber's fiscally conservative Blue Dog Democrats appear to be on board with the bill. In exchange for getting their “pay-go” legislation approved this past summer, the Blue Dogs agreed to waive the pay-go rules from the SGR fix, Cooper said.
The question is whether the House bill would survive a Senate vote, or suffer the same fate as Stabenow's legislation. Getting those additional 13 votes will be a “steep mountain to climb,” Cooper said.
Jack Lewin, CEO of the American College of Cardiology, agreed that the Senate is going to be reluctant to write off the national debt on the SGR. “I'm worried politics will get in the way.”
Swift House passage, however, “will put down a significant marker that will only increase pressure on the Senate to act,” Gilberg said, adding the Senate leadership “indicated they plan to bring up the issue again.”
More pressing in the Senate is the broader healthcare reform bill. Leaders outlined a path that could lead them to begin debate on their version of a health reform bill this week despite missing a major component of the bill—a CBO assessment of its total financial impact.
While Senate Majority Leader Harry Reid (D-Nev.) has been working closely with the CBO for more than three weeks, Congress' official “scorekeeper” had not released a final price tag for the bill by the end of last week. Still, Reid made a number of procedural moves that would allow the Senate to start debate on the bill, giving it a chance to be wrapped up by the end of December.
With the game clock quickly winding down, a still-divided cadre of Democrats got a pep talk from former President Bill Clinton last week. “The point I tried to make is that this is an economic imperative as well as a healthcare imperative,” Clinton said of his midday speech. “It's not important to be perfect here,” he said. “It's important to act, to move, to start the ball rolling. And it is important to get it done this year.”
—with Matthew DoBias
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