Legislation a relief?

It's called the Physician Payment and Therapy Relief Act of 2010, but the legislation President Barack Obama signed last week offered little relief to medical practices seeking to prepare their 2011 budgets and deciding whether to participate in Medicare next year.

The legislation was a temporary measure that extended a 2.2% increase in Medicare reimbursement to physicians and postponed a 23% pay cut.

Pat Smith, senior vice president for government affairs of the Medical Group Management Association, said the situation reminded him of the Bill Murray movie in which the actor's character relives the same day over and over again. “It's been like ‘Groundhog Day' every couple months,” Smith said noting that last December, Congress also passed a temporary fix in the sustainable growth rate formula, or SGR, used to calculate physician Medicare payment rates. That was followed by temporary fixes in February, March and June.

“This is the year that the SGR formally became an afternoon TV serial,” said William Jessee, the MGMA's president and CEO. “All year long, it's been ‘Stay tuned for the next episode.' ”

Smith said Congress is aware of the difficulties this uncertainty creates. During the MGMA annual conference in October, attendees sent some 3,700 e-mails to Congress demanding a solution. Over the course of the year, Smith said MGMA members have contacted Congress more than 60,000 times on the issue. “It's my understanding that it's up on top of their to-do list,” Smith said. “Is it at the same level of the START treaty, or extending tax cuts or funding the government for the next 12 months? Probably not, but people understand the magnitude.”

Officials at the American Medical Group Association expressed similar thoughts. “It's extremely frustrating that the best they can do is a one-month, kick-the-can-down-the-road,” said AMGA President and CEO Don Fisher.

“The game of politics, it never stops—it doesn't matter who's in charge,” said George Roman, AMGA senior director for health policy. “Organized medicine has presented all sorts of dire consequences for all sorts of things, and Congress has stepped in at the 11th hour. I don't think organized medicine is crying wolf.”

Nancy Elder, a family physician and University of Cincinnati College of Medicine associate professor, said she didn't think the 30-day “patch” would accomplish anything. “There will probably be another 30- to 60-day pay fix after that,” she said.

Physician Nicholas Wolter, CEO of the Billings (Mont.) Clinic said, despite the deep divisions between political parties, this is an issue Democrats and Republicans can rally behind. “This is a problem that affects the entire Medicare population and physicians of all political persuasions,” he said. “Ideally, this is not a political party issue; it's a quality and fiscal issue.”

The National Commission on Fiscal Responsibility and Reform also has criticized the SGR formula, and it noted that current healthcare budget projections are based on “large phantom savings from a scheduled 23% cut in Medicare physician payments that will never occur.” “The bipartisan commission on deficit reduction actually did recommend fixing the SGR—that was the good news,” Fisher said. “The bad news was the fix is to have draconian cuts in Medicare programs.”

Smith said the key to patching the system for 12 months is finding $17 billion in cuts from elsewhere in the federal budget. While, theoretically, those cuts can be made anywhere, they are likely to come from healthcare spending—with a focus on Medicare Part B.

Wolter suggested further reforms regarding physician ownership on hospitals and imaging and surgery centers would do more to curb costs as he said the evidence shows physician ownership is linked to higher volumes of Medicare patients using expensive healthcare services.