When Congress passed the early morning fiscal cliff compromise there was largely relief across the country. Unfortunately, when it comes to brinksmanship politics, the fine print can get a bit messy and there is often collateral damage and the healthcare sector took a couple of those hits.
Doctors, no doubt, were relieved that Congress averted the steep reimbursement cuts related to the SGR. Certainly no one ever believed the fiction that doctors were going to see a 26.5 percent cut in their reimbursement rates, so we get yet another one-year solution to maintain reimbursement rates at a cost of roughly $25 billion over 10 years.
Sounds good on the surface until you realize that Congress "paid" for the doc fix by making cuts in other areas of healthcare, with the bulk of it on the backs of reduced reimbursements to hospitals.
What Congress did to provide the doc fix is nothing more than a shell game: the doctors got the shell with the $25 billion under it and the hospitals got the empty one. Or as some in the industry have noted, the doc fix was really about "robbing Peter (hospitals) to pay Paul (doctors)."
Nearly 60 percent of these cuts will come from two areas. Roughly $10.5 billion is forecast to come from heightened audits on hospitals as the federal government looks to recoup the money from over-coded claims. Another $4.2 billion will come from reductions in disproportionate share hospitals - direct payments to hospitals that care for an above-average number of Medicaid patients.
The illogicality of this should be apparent: seniors (and the poor) don't just receive care from primary care physicians, they also receive it from hospitals and weakening hospitals by choking off significant streams of revenue will likely result in worse care for patients.
In short, fixing the SGR each year shouldn't be done in such a way as to pit one sector of the healthcare industry against the others.
Or as Rich Umbdenstock president and CEO of the American Hospital Association put it in a prepared statement after the fiscal cliff deal was passed: "While fixing the physician payment formula is essential, it should not be done by jeopardizing hospitals' ability to care for seniors and their communities. That's why we are very disappointed at the approach taken in this measure."
While primary care physicians have a right to be relieved, the deal merely keeps steady their reimbursements and doesn't provide any kind of inflation adjustment, so the primary care docs continue to fall behind by degrees.
The associations that represent doctors, too, have become weary of the annual doc fix charade - a fix that really isn't a fix at all. The American College of Physicians, the American Academy of Family Physicians and the American Medical Association all mustered as much positive as they could while knowing that this time next year, they will be raising the same red flags to fight off the cuts again.
Perhaps the AAFP's Glen Stream's reaction to the 2013 SGR fix puts it best: "This is a welcome relief, but it is not the solution."