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'Doc Fix' Provides More Questions than Answers

 |  By Margaret@example.com  
   December 17, 2010

With a stroke of a pen, President Obama Wednesday signed the so-called 'Doc Fix' bill. The law delays by one year implementation of the sustainable growth rate formula, which sets the rates of Medicare reimbursements to physicians.

Healthcare groups have publicly applauded the postponement, saying that it is vital to ensuring the availability of healthcare coverage for seniors.

Privately, however, many remain frustrated that a permanent solution to the Sustainable Growth Rate formula for Medicare funding, which has called for cuts in Medicare reimbursement over the past decade (including a 25% reduction in Medicare reimbursements that would have taken effect  Jan. 1, 2011), remains so elusive.

Among others, President Obama recognizes the need for this issue to be dealt with once and for all. “It's time for a permanent solution that seniors and their doctors can depend on, and I look forward to working with Congress to address this matter once and for all in the coming year,” he said last week after the U. S. House voted overwhelmingly to delay the cuts.

For its part, Congress voted in favor of delaying the nearly $20 billion in reductions to physician pay five times this year alone. 

Perhaps the easiest question to answer in regard to the seemingly perpetual delays to Medicare reimbursement cuts is, “how did we get into this mess?”

“It’s the insane rules of the budget game in Washington,” said Bruce Vladeck, former administrator of the Health Care Financing Administration (HCFA). “It often boils down to selective insistence by some members of Congress relative to what is allowed to enter the deficit and what isn’t.”

More often than not, SGR has fallen into the latter category, with lawmakers believing that a true physician compensation solution should have funding before it’s approved.

According to Senate Majority Leader Harry Reid (D-NV), the legislation would be paid for by modifying the policy regarding overpayments of the healthcare affordability tax credit.

But the irony is that the longer Congress avoids a permanent solution, the greater toll the SGR formula extracts on the federal budget. “There is the underlying deficit that is something akin to $300 billion that needs to be dealt with first,” says Anders Gilberg, vice president of public and private economic affairs for the Medical Group Management Association (MGMA). “This is the biggest impediment to long-term reform.”

So can we expect more of the same waffling next year when this most recent temporary fix runs out? Experts say it’s highly likely, though there are avenues that could serve as a permanent solution, including implementing a system that tracks some level of medical inflation to pay physicians for the real cost of delivering care.

But that still leaves the issue of how to pay for the collected Medicare reimbursement deficit racked up over the past decade. Vladeck, now a senior advisor with healthcare consulting firm Nexera, has his thoughts: “I suspect there will be a balanced budget act at which point I would hope [a permanent solution] be addressed since that is probably the best vehicle to pay for a fix.”

John Commins contributed to this report.

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