Despite objections of a large block of fiscally conservative Republicans, the House yesterday approved a fiscal cliff compromise crafted in the Senate in the first hours of the new year by a vote of 257 to 167, which also averted steep Medicare payment cuts to doctors for yet another year.
While physicians may be cheered by the $30 billion included in the fiscal cliff compromise to avert the 26.5 percent cut in Medicare payments as dictated by the sustainable growth rate (SGR) formula passed in the late 1990s, hospitals have been asked to "pay" for a significant portion of the payment cut delay over 10 years through reduced Medicare and Medicaid payments.
The Senate bill passed yesterday would save $10.5 billion over 10 years by reducing Medicare base payment increases for inpatient care and another $4.2 billion over the next 10 years by reducing Medicaid Disproportionate Share Hospital payments. It also included legislation to re-price end-stage renal disease payments, which could save as much as $4.9 billion over the same time period.
Provider groups weren't pleased with the legislation's robbing-Peter-to-pay-Paul approach to averting the SGR cuts.
"While fixing the physician payment formula is essential, it should not be done by jeopardizing hospitals' ability to care for seniors and their communities," said Rich Umbdenstock, president and CEO American Hospital Association, in a statement reacting to the legislation. "That's why we are very disappointed at the approach taken in this measure. Hospitals are working to provide high-quality, innovative and effective care to seniors in their communities. Additional payment reductions will make it harder for patients to access the care they need and depend on."
Bruce Siegel, president and CEO of the National Association of Public Hospitals and Health Systems (NAPH) echoed those sentiments in his own statement noting that while the overarching fiscal cliff deal helps to avoid economic hardship for the nation, "it nonetheless puts at risk essential health care for millions of vulnerable people. Solving one side of the provider equation must not come at the expense of the other – particularly the hospitals and health systems that care for a disproportionate share of Medicaid and other low-income patients."
The refrain from industry groups representing doctors and group practices was a familiar one: relieved that the physician payment cuts were once again delayed, but also tinged with a growing sense of frustration over the lack of a permanent fix to the severely broken SGR.
Glen Stream, MD, board chair of the American Academy of Family Physicians (AAFP) said in a statement that the current system of fixing the payment formula every time the newest patch is set to expire, yearly, semi-annually or even monthly as it has been in the past creates a "crisis of confidence" among Medicare beneficiaries and their doctors. The newest one-year reprieve "is a welcome relief, but it is not the solution."
Jeremy Lazarus, MD, president of the American Medical Association, was more pointed in his criticism and contends that the continued failure of Congress to act on a permanent "doc-fix" may be hindering health reform. "This last-minute action on the part of Congress is a clear example of how the Medicare program is increasingly unreliable for physicians and patients," Lazarus noted in a prepared statement. "This instability stalls progress in moving Medicare toward new health care delivery models that can improve value for patients through better care coordination."
[See also: SGR debate intensifies]