Medicare Cuts Delayed, Not Eliminated

All eyes in Washington and the medical community were on Senator Jim Bunning (R-KY) this week as he single-handedly held up an unemployment benefits bill that included a provision to delay the 21% reduction in Medicare reimbursements to doctors, which was scheduled to take effect March 1.

Technically, it did go into effect. But CMS asked contractors to hold claims for 10 business days in order to buy time for the Senate to talk Bunning down off his ledge.

The Senator's objections were valid enough—he was concerned about adding to the deficit and wanted Congress to stick to the pay-go requirements it had passed a few weeks earlier. The problem had more to do with procedure. A single Senator representing one state gummed up the works for every physician in the country, not to mention the unemployed Americans counting on benefits.

Bunning ultimately dropped his objection, and the Senate voted overwhelmingly to postpone the Medicare reimbursement cut until the end of March.

But so what?

This was barely a victory at all for physicians. The alternative—a 21% drop in payments—would have certainly been worse, but all that was gained is another delay in a long series of delays that have done little to fix the underlying problem with the sustainable growth rate formula (SGR).

If Congress couldn't come up with a permanent solution by the end of 2009, when the cut was originally scheduled to kick in, and if they couldn't put together a bill by the March 1 deadline, it's hard to believe that another 30 days is going to make much of a difference.

The problem goes back to Bunning's concern about the deficit. He was getting obstinate about a bill with a relatively small price tag, but to permanently repeal the SGR would cost nearly $250 billion over 10 years. That's why a bill that would have done just that failed in the Senate last fall after passing in the House.

The cost will only grow if Congress kicks the can down the road another few years, but unfortunately politicians prefer hypothetical future pain over guaranteed immediate pain, especially during an election year.

At this point, a permanent fix in the next few months seems unlikely. The Senate is currently debating another bill that includes a provision to freeze payments until September 30 of this year. By the end of March, Congress will probably pass that to buy more time.

The SGR boondoggle actually makes a pretty compelling case for moving forward with the proposed Independent Medicare Payment Advisory Board that many physicians (particularly in select specialties) seem to oppose.

Some doctors fear that the board would significantly redistribute reimbursement from specialists to primary care doctors, or that it would enact unpopular payment changes that physician lobbies would be powerless to stop.

That is a possibility, of course. But it would also have the authority to follow through with proposals for moving away from the SGR formula and even change the underlying structure of the physician reimbursement system. It could take action, for a change.

American Medical Association physicians are in Washington this week to personally encourage Senators to pass the legislation that stalled last fall. Maybe it will work and Washington can redeem itself.

But Congress has pushed the SGR problem down the road for so long that it's hard to believe that it is actually capable of solving it anymore.