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After A Decade, Congress Moves To Fix Doctors' Medicare Pay

Posted: September 6, 2013

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Federal lawmakers have been unable to solve a widely acknowledged problem with the formula used to set the pay for doctors who treat Medicare patients. Now, after a series of temporary patches, a bipartisan solution may be at hand.

I think I see the problem.

I think I see the problem.

Hear the words health care and Congress, and you think fight, right?

And you'd be forgiven, particularly because the House has now voted some 40 times in the past two years to repeal or otherwise undo portions of the Affordable Care Act.

But something unusual happened just before Congress left for its summer break. The House Energy and Commerce Committee voted 51-0 for a bill that would overhaul the way Medicare pays doctors.

The bill would, among other things, repeal something called the sustainable growth rate formula, or SGR, and eventually replace it with a system that would pay doctors based on how healthy they keep their patients.

The current formula has threatened to cut physician pay, often by double-digit rates, for each of the past dozen years.

"Since its passage in 1997, SGR has bred uncertainty and frustration," said Energy and Commerce Chairman Fred Upton, R-Mich., during the panel's consideration of the bill. "Doctors have been forced to endure eleventh-hour fixes, sometimes on a monthly basis, which clearly have stymied physicians' abilities to run their practices."

Efforts to undo those cuts have come to be known as the "doc fix." And finding the money to pay for each fix has become an annual, and, as Upton mentioned, sometimes monthly headache for doctors, lawmakers and seniors.

But while just about everyone agrees that the payment formula is flawed and that cutting Medicare doctor pay is a bad idea for doctors and the seniors they serve, no one seemed to be able to figure out how to fix it.

So pretty much every year since 2001 Congress has put in a patch and promised that next year it woud figure something out for the longer term.

"Over the last 10 years we've spent about $146 billion on patches and patches and patches," says Ardis Hoven, president of the American Medical Association. "We lived through 2010," she said, when Congress had to avert cuts on a monthly basis for part of the year — something Hoven says was more than a little frustrating for doctors and their patients.

"People can't run practices like that," she says. "They can't budget; they can't plan; they can't do anything. And it was very destabilizing."

Still, despite concerns, it seems relatively few doctors followed through on threats to stop treating Medicare patients. While the number of doctors dropping out of the program has increased in recent years, that number is still relatively small, according to the Department of Health and Human Services. And the proportion of doctors taking new Medicare patients is actually higher than those accepting patients with private insurance.

But Congress still wants to stop having to deal with the issue of having to affirmatively cancel a scheduled pay cut every year.

So what makes this year different? One thing is that legislators really did got tired of hearing the phrase "kicking the can down the road," said Texas Rep. Michael Burgess. He's a Republican member of the Energy and Commerce Committee, a doctor, and former member of the AMA House of Delegates. He also one of the lead negotiators on the bill.

"I know I've heard leader Cantor talk about it when we were in the minority," said Burgess, referring to House Majority Leader Eric Cantor, R-Va. "That maybe we were in the minority because we didn't solve big problems, and the SGR was one he always alluded to."

Another reason fixing the problem seems more possible this year is that it's on sale. Literally. Because health care costs in general, and Medicare costs in particular, have been growing more slowly, early this year the Congressional Budget Office said that eliminating the SGR formula and its scheduled cuts would cost only about half as much over 10 years as it predicted last year.

That was important, says AMA's Hoven, because "it sent a different message, I think, that the cost of this was something that could be more easily and readily managed."

Of course even at half-price that 10-year cost is still around $140 billion, and the House Energy and Commerce Committee bill sidestepped the thorny issue of how to pay for it.

"If this legislation is to become law it is imperative that we continue to work together, along with our colleagues on the Ways and Means Committee, to develop pay-fors that maintain our bipartisan consensus," said Energy and Commerce ranking member Henry Waxman, D-Calif.

All of which raises yet another potential obstacle. Oversight of Medicare in Congress is shared by two committees in the House and one in the Senate. All three are working in tandem — and with the same unusual bipartisan cooperation — to solve the physician pay problem this fall, before the current fix runs out.

But for that to happen it means lightning will have to strike not just once, but in three separate places by the end of the year.

Copyright 2014 NPR. To see more, visit http://www.npr.org/.

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