SGR Revisited
Congress reconvenes next week for a lame duck session. While most observers seem to feel nothing will get done due to the upcoming changes in the composition of both the House and Senate, it is hard to believe they won't tackle the impending SGR problem.
As all physicians know, under the decade old law that adjusts Medicare rates paid to physicians if the actual utilization and costs exceed what is deemed the appropriate rate of growth, the physician reimbursement rates are to be reduced for the following year. In past years, Congress has continually postponed the effective date of such reductions, which then accumulate annually.
CMS in its final Medicare Physician fee Schedule for 2011 has made it clear that these accumulated SGR adjustments, the postponement of which ends this month, will take effect in December (with a 23% cut in payment rates December 1) and will continue in 2011 (with an additional 1.9% cut January 1).
Congress is between a rock and a hard place, as it certainly doesn't want to have deal with the uproar of the physician community and the potential refusal to treat more Medicare patients. On the other hand, the financial structure of the PPACA changes is premised on letting the SGR adjustments take effect. The additional cost of the health care reform without applying the SGR reductions has been estimated at between $250-350 Billion Dollars. With the public screaming that reform is too expensive as now planned, what will the reaction be to another $250 Billion?
I see only one politically expedient solution for Congress: allow a slight SGR reduction each year for the next couple of years, but continue to postpone a major fix until the new independent payment board takes over the annual responsibility for setting rates to address increasing medicare costs. That Board can make SGR cuts and will not be directly subject to the physicians' or voters' wrath, or better yet, devise a better way to pay physicians and other providers.
At this point, let's hope the lame duck session of Congress is willing to at least take on this looming crisis before December.
