Enacted in 1997, the sustainable growth-rate formula links physicians' Medicare pay to the economic growth rate. Starting in 2003, Congress enacted a series of legislative “patches” that prevented the cuts from taking place; it's estimated that those patches have cost taxpayers $153.7 billion.
Few politically palatable options are on the table to pay for a permanent doc-pay fix. Sen. Ron Wyden (D-Ore.) recently introduced bipartisan legislation that would save money by coordinating the care for the sickest 5% of Medicare beneficiaries. Wyden says it would save Medicare as much as $25 billion a year.
The Congressional Budget Office listed other possibilities. The largest involved the tax exclusion of employer-provided healthcare benefits, which cost the Treasury $250 billion in 2013. There's a chance that scaling that back could gain traction to pay for a doc-fix since three Republican senators recently unveiled a healthcare reform alternative that would limit the tax exclusion to pay for tax credits for the uninsured.
There were 15 other healthcare-specific options listed in the CBO report. Most are politically charged. Raising the Medicare eligibility age to 67, for example, would reduce the federal deficit by $19 billion over the next 10 years.
But there is almost no chance of that passing in an election year—or maybe ever. “No one is going to raise the eligibility age to pay for an SGR fix,” said Dr. Robert Berenson, a senior fellow at the Urban Institute.
Follow Andis Robeznieks on Twitter: @MHARobeznieks