Another Short-Term Patch for the Troublesome SGR

Congress voted today to extend payroll tax cuts, unemployment benfits and the current Medicare physician payment through the end of 2012. The bill now goes to President Obama for his signature, as members of Congress prepare for a week-long recess to observe the President’s Day holiday.

While conferees hammered out the legislation earlier this week, representatives of the NCMS met with the North Carolina Congressional delegation to push for a permanent replacement for the Sustainable Growth Rate (SGR) formula, used to set Medicare physician fees. The SGR is deeply flawed and has generated recommendations for unwarranted reductions in physician reinbursements almost since its inception. Physicians from throughout the country lobbied intensively this week for a permanent solution to the problem. The AMA expressed disappointment with the patch, saying Congress missed an opportunity to protect access to care for patients by eliminating and replacing the flawed formula.

Under the plan, instead of the 27.4 percent physician payment cut scheduled to take effect on March 1, a payment freeze will be in effect through December 31, 2012. According to an AMA update, the cost of the patch will be offset through reductions in a number of health care programs, including Medicaid disproportionate share payments to hospitals, Medicare bad debt payments to hospitals, federal Medicaid payments to Louisiana, and the prevention fund created by the Patient Protection and Affordable Care Act. Published and broadcast reports put the price for preventing the cuts in Medicare physician reimbursements at $20 billion.

Other expiring Medicare policies were reportedly also extended through the end of 2012, including the “floor” on geographic adjustments to the physician work component of the Medicare fee schedule, the therapy cap exemption process, and ambulance add-on payments. Two policies—Section 508 hospital and specialty pathology payments – will be phased out, and mental health add-on payments and pay increases for bone density scans have been eliminated.

Related articles:

Medicare paycut delayed 10 months under tentative agreement, 2-15-12, AMAWire

Details of SGR deal released (Modern Healthcare, 2-16-12)


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