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Senate Seeks to Advance Medicare Payment System Reform

A long-term solution to the "doc fix"?

by
Rodrigo Sermeño

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May 16, 2013 - 2:35 pm
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WASHINGTON – Senators said Congress has a window of opportunity now to fix the current Medicare physician payment system, a volume-driven model that encourages medical providers to focus on offering more procedures instead of improving quality.

Senate Finance Committee chairman Max Baucus (D-Mont.) said at a hearing Tuesday that the time has come to repeal the “sustainable growth rate” (SGR) formula used to calculate doctor payments and replace it with a payment system that is more predictable.

The Finance panel hearing focused on repealing and replacing Medicare’s SGR, which mandates reimbursement cuts that have piled up for years as lawmakers have struggled to find a long-term solution. Congress has deferred Medicare physician payment cuts each year since 1997 through a fiscal maneuver dubbed the “doc-fix.”

“Each year, Congress has intervened to prevent these cuts. But we need to get beyond this annual ‘doc fix’ ritual. The year-in, year-out uncertainty is not fair to physicians or seniors,” said Baucus in his opening statement. “We need to ensure that seniors can continue to see their doctors. We must permanently repeal this broken formula and we need to do it this year.”

The 1997 Balanced Budget Act introduced the SGR to keep the growth rate in Medicare physician-related spending per beneficiary in line with the nation’s gross domestic product growth. But beginning in 2002, the formula would cut physician payments. Medical groups lobbied for a series of “doc fixes” that prevented the cuts from going into effect. Baucus said Congress has made 15 short-fixes to the SGR since 2003 at a cost of nearly $150 billion. In 2010 alone, the senator added, Congress passed six short-term fixes.

“Congress has chosen to override the legislative reductions for years, and that coupled with continued service volume growth has led to an annual process of trying to avoid large fees reductions by the end of the year,” said Dr. Mark Miller, executive director of the Medicare Payment Advisory Commission, in his testimony at the hearing.

Other lawmakers and experts present at the hearing echoed Baucus’ sentiment, noting a recent report by the Congressional Budget Office (CBO) as a major factor for the need to act quickly. Enthusiasm to fix Medicare’s payment system rose this year after the CBO cut the estimated cost for reforming it.

“I believe we currently have a good window of opportunity before us. But, we must act soon,” Sen. Orrin Hatch (R-Utah) said.

In February, the CBO reported slower growth in Medicare costs and lowered its estimate for the 10-year cost of addressing the formula and freezing physicians’ payments from $245 billion over the course of 10 years to $138 billion. The price tag for fixing the doctors’ pay formula will remain at a record low, according to an updated estimate from the CBO released on Tuesday.

“The time to repeal is now, as you noted yourself, the cost of the repeal has been revised downward…but history is cautionary here; this is because service volume has slowed down but trends in service volume are volatile and if they reaccelerate the cost of repeal the SGR will go up again,” Miller said.

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All Comments   (5)
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Seniors would "see" doctors considerably less than they do if doctors didn't have a legal government enforced monopoly over access to medical drugs. The supposed "shortage" of primary care physicians is due the time the doctors "waste" seeing patients who are only there because the doctor holds the power of continued access to medical drugs over their head. Seeing people who really don't need to be "seen" is easy money for a doctor. The added unnecessary visits adds considerably to the cost of Medicare. Repeal of prescription laws (with the exception of narcotics and habit forming drugs) would free up physician time to see those who do actually need to see the doctor. Of course these people would require the doctor to actually "work", use his knowledge as a doctor, instead of taking the "easy way out" in seeing people who have no real need to see the doctor, but whom the doctor likes to see because it is "easy money" and in many cases, also results in "kick backs" from having the individual in question have lab tests which of course means employment for people who wouldn't otherwise be employed. Visit my blog at "www.muskegonlibertarian.wordpress.com"; for further details.
48 weeks ago
48 weeks ago Link To Comment
"...people who have no real need to see the doctor."

Just curious how 'you' determine a patient dosen't need to see a doctor? Most "seniors" take a cocktail of drugs that can interact and many require labs for organ funtion and toxicity monitoring, etc. Most seniors require a total health evaluation on a rather constant continuum simply because of age and multiple biological ailments and or such potential. Are you maybe advocating seniors recieve less than full healthcare protocols because they're well.....old?

The major reason theres a shortage of primary care physicians is that most are greedy and choose to go into speciality disciplines where the big bucks and less work are...except for some specialty surgeons. Likewise, today, many med schools are tightening their entrance standards and giving fewer admissions.

Otherwise, I'm on your side with the high level of corruption across all the health care industries, creating usustainable and arbitrary inflation.
48 weeks ago
48 weeks ago Link To Comment
"...people who have no real need to see the doctor."

Just curious how 'you' determine a patient dosen't need to see a doctor? Most "seniors" take a cocktail of drugs that can interact and many require labs for organ funtion and toxicity monitoring, etc. Most seniors require a total health evaluation on a rather constant continuum simply because of age and multiple biological ailments and or such potential. Are you maybe advocating seniors recieve less than full healthcare protocols because they're well.....old?

The major reason theres a shortage of primary care physicians is that most are greedy and choose to go into speciality disciplines where the big bucks and less work are...except for some specialty surgeons. Likewise, today, many med schools are tightening their entrance standards and giving fewer admissions.

Otherwise, I'm on your side with the high level of corruption across all the health care industries, creating usustainable and arbitrary inflation.
48 weeks ago
48 weeks ago Link To Comment
Baucus, 2013: “We need to ensure that seniors can continue to see their doctors."

Too late - already lost the specialists who were good, because of that 'doc fix uncertainty', since 2007 when the Dems controlled Congress.

Without that specialist, would prefer a death panel because no access to specialists is a slower death sentence.
48 weeks ago
48 weeks ago Link To Comment
1) Any reform that comes out now will have to be tied to Obamacare. Death Panels anyone? The end result will be to kill off as many "useless eaters" as they can, as quickly as they can.

2) By the 9 Billion Names of G-d, this is coming out of the Senate! The Democrat controlled, Reid-run, RINO infested Senate. When was the last time something came out of the Senate that was not bad for the country and a betrayal of its people?

Subotai Bahadur
48 weeks ago
48 weeks ago Link To Comment
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