House Republicans late last week introduced a bill that may make the nation's physicians breathe a little easier about their Medicare payments, but could leave hospitals gasping that they're being shortchanged to make that happen.
GOP legislation offers temporary doc fix
In legislation that would extend a payroll tax holiday and reform the unemployment insurance program, House GOP members included several healthcare-related provisions, including one that would avert the looming 27.4% cut in Medicare payments to physicians and provide a 1% payment increase to doctors in 2012 and 2013.
The two-year fix—estimated to cost $38.9 billion—is the longest temporary measure that Congress has approved since 2004 to prevent drastic payment cuts to doctors that are called for under the sustainable growth-rate, or SGR, formula. The move is intended to give federal lawmakers more time to find a permanent solution to how doctors are paid through the Medicare program, according to a summary from the House Ways and Means Committee.
“I think this is a positive move,” Rep. Tom Price (R-Ga.), a physician who serves on that panel, told Modern Healthcare hours before the bill was introduced.
“It's not all that I would want,” he continued. “I think it's a commitment on the part of committees of jurisdiction and leadership to come to a resolve of this issue that has really been a thorn in the side of every single individual providing care.”
According to the committee's summary, the bill would extend four Medicare-related policies that are set to expire. Those include maintaining the add-on payment increases for ground ambulance services and extending the Qualified Individual, or QI, program, which provides assistance to low-income seniors for their Medicare Part B premium. It would also extend the physician work geographic adjustment, which would extend until December 2012 the current floor that is used to calculate the portion of Medicare physician payments that accounts for the geographic area where a physician practices. And it would also extend the outpatient therapy caps exceptions process.
Absent congressional action, the therapy caps exceptions process is set to expire and Part B outpatient therapy services—provided by non-hospital providers—would be capped at $1,889 starting in 2012. A provision in the Middle Class Tax Relief & Job Creation Act of 2011, as the proposed legislation is called, would extend that process through December 2013.
A blog post from the office of House Speaker John Boehner (R-Ohio) said everything in the bill is paid for through spending cuts rather than through tax increases. For instance, the bill would repeal $8 billion in mandatory funding from the Patient Protection and Affordable Care Act's prevention and public health fund; prevent about $13.4 billion in overpayments of insurance exchange subsidies; increase Part B and Part D premiums for high-income beneficiaries, achieving about $31 billion in savings over 10 years; and make payment cuts to hospitals totaling more than $17 billion over 10 years.
That figure results from $10.6 billion in cuts to hospital bad-debt payments and about $6.8 billion in reductions to hospitals for evaluation and management services of physicians who provide services in hospital outpatient departments.
“We're extremely disappointed in this bill,” said Tom Nickels, senior vice president of federal relations at the American Hospital Association. “It has major reductions to hospitals in excess of $17 billion. It makes significant reductions to hospital outpatient department payments—which are already underfunded—and makes reductions for bad debt.”
Nickels said the AHA is also unhappy with a provision that loosens restrictions on physician-owned hospitals.
“We support fixing the SGR,” he said. “No one wants to see physicians reduced 27.4%. But paying for it with cuts to hospitals is unwarranted,” Nickels added. “You're basically going to not cut physicians on one hand, but you're going to cut payments to hospitals for physicians on the other hand.”
Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association, said the SGR issue is being “buffeted by the political winds” that are blowing, including one provision in the bill that would approve the Keystone XL oil sands pipeline, which would transport oil from Canada to the U.S.
“Obviously, we would think an increase is better than a freeze,” Gilberg said of the plan for a 1% payment update to physicians. “The reality is, thinking two years out, we have to keep in mind: There will be a 38% to 40% cut on the books then. At some point, the levee is going to break on the SGR, so we—MGMA and the physician community—are still advocating doing the fiscally responsible thing, despite the incredibly high cost by repealing the SGR.”
“We're seeing much, much more conservatism on physician practices that are just as much affected by the instability as they would be by a large cut in January,” he added later.
Both the Congressional Budget Office and the Joint Committee on Taxation estimated Friday that, if enacted, the bill would add about $25.3 billion to the nation's deficit over 10 years. The House is expected to vote on the measure early this week.
“I think they will have a very difficult time getting any Democrat votes,” said the AHA's Nickels. “The Senate will not accept this bill,” he added. “It may pass the House, but it will not go any further that, so the negotiating will continue.”
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