The U.S. Senate is expected to vote this week on repealing the flawed SGR formula and its mandatory 21-percent physician pay cut, yet a new CMS report states the permanent “doc fix” would eventually cost doctors more money.
While the bill to replace Medicare's sustainable growth rate formula avoids the short-range physician payment cuts, it raises long-range concerns that will need to be addressed by future legislation, according to CMS Chief Actuary Paul Spitalnic.
“We anticipate that physician payment rates under H.R.2 would be lower than scheduled under the current SGR formula by 2048 and would continue to worsen thereafter,” Spitalnic said in the report. “Absent a change in the method or level of update by subsequent legislation, we expect access to Medicare-participating physicians to become a significant issue in the long term under H.R. 2.”
Payment updates totaling $500 million per year and a .5 percent annual bonus are scheduled to expire in 2025 as the bill incentivizes moving away from fee-for-service to alternate payment models, he said. This will result in a payment reduction for most physicians, Spitalnic said.
In addition, the bill does not account for economic conditions or inflation, and payments are not expected to keep pace with the average rate of physician cost increases, he said.
On March 26, the House overwhelmingly passed H.R. 2 repealing the sustainable growth rate formula used by Medicare to reimburse physicians. SGR mandated a 21.2 percent pay cut on April 1, but after the Senate delayed taking action on the bill, CMS said it would delay processing claims until April 15, giving the Senate time to act.
The Senate began debate Monday. Finance Committee Chairman Orrin Hatch, R-Utah, urged Senators to quickly pass the bipartisan legislation.
Senate Minority Leader Harry Reid, D-Nevada, said there was an urgent need to get the bill passed, though Democrats want some amendments. These include four years of funding for CHIP rather than the two included in the bill, and removing a cap on physical-therapy services.
The estimated $214 billion cost of H.R. 2 would be financed through federal deficits, higher Medicare payments by wealthier beneficiaries, and through costs to providers.
The House bill is broadly aimed at moving Medicare reimbursement from fee-for-service to a value-based model, a trend reshaping the entire U.S. healthcare industry. It also continues funding for the Children’s Health Insurance Program.
The bill would also add $145 billion in government spending, widening the deficit, according to the Congressional Budget Office. The bill would also increase revenues by about $4 billion, for a total $141 billion increase in the federal budget deficit, the CBO said.
Photo: Russel Senate Office Building via Wikipedia.
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