The American Medical Society sent Congress a letter yesterday urging lawmakers to use excess baseline budget projections for military actions in Iraq and Afghanistan to fix Medicare's sustainable growth rate (SGR) formula and avert a 27 percent cut to physician payments set to begin on March 1.
"There is bipartisan agreement that this issue has plagued Medicare and TRICARE for too long, and the cost for a permanent cure will never be less than it is right now," said Peter W. Carmel, MD, president, AMA in a press release. "Using funds that will not be needed as the wars wind down to protect healthcare for men and women in uniform and our nation's seniors is the fiscally responsible thing to do."
In the letter to Rep. Dave Camp (R-MI), chairman of the House Ways and Means Committee, AMA and scores of state and specialty medical associations note that with the war in Iraq winding down, now is the time to use the budget projections of the Overseas Contingency Operations (OCO) to help offset necessary Medicare baseline changes.
[See also: Obama's FY12 budget includes money for Medicare doctor payments.]
"Using the OCO baseline as an offset for the accumulated SGR bad debt amounts to 'cleaning the books,' by eliminating one flawed budget gimmick with another and allowing for a more accurate accounting of future government expenditures without increasing the federal deficit," the letter stated.
The letter also pointed out that as Congress continues to delay repealing the SGR payment formula, the costs of fixing it increase with each passing year. It contends the cost today to fix the Medicare payment formula is $290 billion, whereas in 2005 the so-called Medicare "doc-fix" would have cost only $48 billion.
Over the past decade, Congress has instead opted to override the SGR payment formula a total of 13 times in order to avert deep Medicare payment cuts to physicians. Last year alone, Congress on five separate occasions passed budget fixes that lasted only a couple of months at a time. The current patch, passed at the end of December expires at the end of next month.
[See also: Medicare trust fund projected to run dry by 2024.]
But other budget concerns often crowd out SGR in negotiations in Congress and as time has passed and the price tag grown to fix the formula, the political will in both parties to fix the problem has not been particularly strong. Getting a fix given current budget challenges could prove difficult.
"We agree that our nation faces significant fiscal challenges, and that Medicare is not immune. However, it is impossible to implement commonsense programmatic reforms while an immediate and constant threat of massive cuts hangs over the program," the letter concluded. "Accordingly, we urge you to utilize the opportunity provided to this conference committee to eliminate the SGR permanently."