MedPAC Votes to Kill SGR

Margaret Dick Tocknell and John Commins, October 7, 2011

The Medicare Payment Advisory Commission on Thursday voted to repeal the contentious  sustainable growth rate formula and replace it with a controversial plan that would include reimbursement cuts to specialists and pay freezes for primary care physicians.

MedPAC is charged with advising Congress on Medicare payment policy issues, including reimbursements to physicians, hospitals, labs and imaging centers. SGR was put in place as part of the Balanced Budget Act of 1997 to help control Medicare spending. It soon became apparent that significant cuts in physician reimbursements would be required to help reduce spending.

Typically Congress has ignored MedPAC's payment reduction recommendations. It's been 10 years, for instance, since Congress has actually enacted any cuts to physician reimbursements.

Now the proverbial chickens are coming home to roost. Unless some action is taken before  Jan. 1, 2012, Medicare payment rates for physicians will drop by 29.4%. In the current political climate, however, Congress and President Obama are unlikely to intercede and delay the cuts as they have in the past.

Details

MedPAC has proffered a plan that calls for $335 billion in reimbursement reductions over 10 years. The so-called "doc fix" will account for $100 billion. Specialist would see their reimbursement rates reduced by 5.9% each year for three years and then frozen for seven years. PCP reimbursements would remain unchanged for the next 10 years.

Margaret Dick Tocknell Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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