The “doc fix” before Congress might not be so permanent after all.
The new payment system would actually result in lower Medicare payments to doctors after 2049 than under the widely loathed sustainable growth-rate formula that it would replace, according to a report issued Thursday by the CMS' office of the actuary. Over 75 years, Medicare Part B spending would actually be slightly less than the $21.8 trillion anticipated under current law.
“While H.R. 2 addresses the near-term concerns of the SGR system, the issues of inadequate physician payment rates are ultimately greater,” the report concludes. “If Medicare payments were to fall to a fraction of payments based on cost drivers, there would be reason to expect that access to physicians' services for Medicare beneficiaries would be severely compromised, particularly considering that physicians are less dependent on Medicare revenue than are other providers, such as hospitals and skilled-nursing facilities.”
The legislation passed the House last month by an overwhelming margin and is expected to be taken up by the Senate next week. Enactment would stave off a 21.2% cut in payments to doctors and end a decade-long cycle of short-term fixes to the Medicare payment problem.
Under the new system, all doctors would receive 0.5% Medicare payment increases over the next four years. But starting in 2020, there would be a two-tier payment system designed to incentivize doctors to shift more of their patients into risk-based payment models. Doctors who qualify for the alternative payment track would be eligible for 5% bonuses annually through 2024. There would also be a $500 million annual appropriation during that time period to reward doctors in the traditional payment system that score high on quality measures.
But those two pots of money would expire after 2024. At that point, doctors on the alternative payment track would see annual payment hikes of 0.75%, three times the rate of other physicians. That's where the payments would begin to fall short of current law and well behind inflation, according to the CMS.
The report comes with a caveat about the difficultly of predicting healthcare costs far into the future. “Reasonable estimates can vary significantly from each other, particularly when applied over many years,” it notes. “While the estimates included in this memorandum are based on reasonable actuarial assumptions and methods, actual experience will likely be different than expected.”
But the findings could make it more difficult for Congress to finally enact a new system for paying doctors after intervening 17 times since 2002 to avert cuts scheduled under the SGR formula.