Dive Brief:
- During a two-day hearing held this week on Capitol Hill, leaders debated how to revamp the formula Medicare uses to calculate physician reimbursement and deal with the Sustainable Growth Rate (SGR) formula.
- The latest SGR patch was adopted last winter after lawmakers failed to agree on the financing of a $128-billion permanent fix. It expires on March 31.
- On Wednesday, lawmakers and witnesses from both parties called for the resurrection of last winter's bipartisan deal, the SGR Repeal and Medicare Provider Payment Modernization Act. At the center of the 10-year replacement plan for SGR is five-year period of stability in the Medicare payment system, including an 0.5% annual pay rate hike for doctors. In the last five years of the plan, the pay rate would be frozen and a series of reforms would be launched to help encourage value-based reimbursement for physicians seeing Medicare patients.
Dive Insight:
The entire face of healthcare delivery has changed in profound ways since 1997, when Congress created the SGR. Since then, healthcare spending has outpaced economic growth, and the result is a multi-billion-dollar gap in funding for Medicare payments to physicians. While various patches have put a bandage over the issue since the first temporary fix was passed in 2003, the quest for a "doc fix" has become a bitter dance Congress performs each year.
Although most lawmakers agree a fix is necessary, disputes over how to pay for that multi-billion-dollar gap are bitter. As a report released this month by the Pittsburgh-based Center for Healthcare Quality and Payment Reform frankly points out, "the draconian 21% cut in Medicare payments to physicians that it requires would make it difficult for physician practices to survive, make it difficult for Medicare beneficiaries to get care, and shift Medicare costs to workers and businesses, while only reducing Medicare spending by 3%."