Congress may have changed as a result of the 2006 elections, but few financial managers see much hope that legislators will permanently address cuts threatened each year as part of the government's Sustainable Growth Rate formula.
On Nov. 1, 2006, the Centers for Medicare and Medicaid Services issued the Medicare Physician Fee Schedule final rule, which included a 5-percent cut in physician reimbursement. Just prior to adjournment, the departing members of the 109th Congress voted to eliminate the cut for the current year, but did not make any attempt to change the law that requires adjustments such as the SGR formula.
"The SGR formula is fundamentally flawed," argued Rick Kellerman, MD, president of the American Academy of Family Physicians. "You put the numbers in (that the formula calls for) and it kicks out a decrease for physicians. Everyone we've talked to agrees on this. We need to find the political will to get this fixed."
"The time is long overdue to devise a sound financing system for the Medicare program so we can avoid this annual struggle," agreed Cecil Wilson, MD, American Medical Association board chairman.
Some 57 percent of respondents to the November-December 2006 NewsMonitor – an exclusive Healthcare Finance News poll – said they expect the 110th Congress to try but fail to change the law, which requires a reduction in payments to account for the combined growth in volume and intensity of physician services.
Another 30 percent took an even darker view, saying they don't even think it will surface for floor debate in the coming year.
Only 13 percent believe Congress will successfully move to eliminate the adjustments.
Although CMS has announced or is planning to announce several new initiatives, including boosting evaluation and management (E&M) services and providing bonuses under pay for performance programs, many fear that these "extras" will undermine Congressional efforts to overhaul the reimbursement system. Even a "budget neutral" implementation, in which new programs only offset scheduled cuts, could have a dire impact on the industry, according to several NewsMonitor respondents.
The cuts, if they occur in 2007, would immediately lead to "less availability of physicians," one poll-taker said. "Physicians will quit practices and retire or just quit medicine," added Paul Doelling, MHA, CMPE Administrator, Specialty Practices, at Gateway Regional Medical Center in Granite City, Ill.