House and Senate negotiators have drafted a pathway for a five-year fix to the Medicare physician payment formula that would give doctors a 1.2% raise for the balance of 2010 with the promise of more to come, healthcare lobbyists say.
Fix in the mix
1.2% SGR update on the table, five-year plan, too
Under the revised provision, part of a broad package of tax extenders and continuations to several safety net health programs, physicians would see a 1% increase in 2011. One year later, the sustainable growth-rate provisions originally set out in the House-passed health reform bill would kick in, according to two healthcare lobbyists with knowledge of the deal, and who spoke on condition of anonymity.
Originally, joint negotiations between members of the House Ways and Means Committee and the Senate Finance Committee focused on legislation passed by both chambers that would have frozen Medicare payments until the end of the year in an effort to hold off a scheduled 21.2% pay cut.
But in the plan currently under negotiations, lawmakers are eyeing a longer-term fix that would prevent future cuts from kicking in. Representatives for the two committees declined to comment.
Though negotiations are fluid and could change, the physician fix blueprint would essentially create two “buckets” of physician services—one that includes defined preventive, evaluation and management visits and primary care and another for all other physician services.
For the first bucket, an inflationary update would be based on a gross domestic product of plus 2%. In the second bucket, the update would be based on GDP plus 1%.
The payment equation is similar to the current SGR structure based on the relationship between growth in physician services matched to growth in the overall economy.
The legislative package would also extend government-backed breaks on premiums under the Consolidated Omnibus Budget Reconciliation Act, commonly known as COBRA, insurance plan for the uninsured, Medicaid relief to the states and overall unemployment insurance.
Lawmakers in both chambers have hinted that they want to move quickly on the package. The current short-term freeze on physician payments expires at the end of the month—about the time Congress begins a two-week recess for Memorial Day.
The House could vote on the package as early as May 19, with the Senate following shortly after.
But some lawmakers have already begun to grumble about the legislation's price tag. The SGR provision alone costs roughly $89.5 billion over five years even though it is exempt from having to be offset by other programs.
Spending on COBRA benefits and on the increased federal financial portion of Medicaid have been deemed emergency measures and, as such, do not have to be paid for in the bill.
What's more, a bloc of fiscally conservative Democrats has balked at the cost of the legislation, with some threatening to vote against the measure. Republicans have not been involved in the negotiations.
And many senators have said that they want to see some of that cost partly offset—an issue that could bog down the process.
Rep. Chris Van Hollen (D-Md.), a member of the House's leadership team, cautioned last week that a final product has not been finalized and changes could still occur. “Personally, I'd like to see five years,” Van Hollen said, referring to the longer-term SGR fix. “The most important thing is to get off of this month-to-month” schedule.
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