A clumsy attempt to address the Medicare Part B physician fee problem has nagged at Washington for a decade, but it appears Congress is ready to put a doc fix in play. Whether it’ll happen depends on politics and, as a skeptic might argue, some accounting sleight-of-hand, but it appears this is a now-or-never moment.
As has been widely noted, the Congressional Budget Office recently released a report proposing a lower figure for the budgetary effects of a repeal of the sustainable growth rate (SGR) mechanism than has been calculated for some time.
Instead of the average figure of $30 billion a year that had been floated a few years ago, CBO claims the figure now stands at roughly $14 billion a year over 10 years. A recent hearing in the House Energy and Commerce Committee makes clear the bipartisan support for a repeal of SGR is as intense as it has ever been, and one has to assume a bill will at least make it through committee.
Among the potential flashpoints in the House is the question of offsets. Rep. Frank Pallone of New Jersey resurrected the idea of using cuts to military spending in Iraq and Afghanistan as an offset, but we should acknowledge that the pay-for question might come across as background noise. Congress may simply resort to the path of least resistance.
Two sources of fudged numbers
There are a couple of points to consider. One is that the current low rate of growth in Medicare expenditures is an anomaly and will vanish as the economy recovers, which means the historical cost growth of 5-6% will resume. This tells us the fiscal claims underlying the current push rely heavily on a bookkeeping convenience, but that’s how accounting is routinely (ab)used.
The second point is that as physicians increasingly become tied to hospitals under accountable care organizations, some spending that has been treated as a Part B expense will fall into Part A, the Medicare hospital silo. This, too, suggests that any easing of physician fee spending could be more apparent than real. It also means Part A is almost certain to balloon and become the new problem child on Capitol Hill.
Perhaps most interesting for physician specialists – beyond the recent Part B fee schedule that shifts resources to primary care at the cost of specialty care – is the rumor that an SGR repeal bill will call for permanent zero updates to the Medicare physician fee schedule (MPFS) within two or three years of that bill’s passage. The message there is clear to specialists and primary care docs alike: Get on board with ACOs or get out of Medicare altogether, because you’d starve under Part B fee-for-service.
So what does it mean if this happens? Basically it’s one item off a hefty to-do list where Medicare spending is concerned. Getting rid of the loathed SGR will remove a perennial headache for both sides of the political aisle and will once again “prove” that Congress can act in a bipartisan fashion, but repealing SGR will do pretty close to nothing to “bend the cost curve.” Not by itself, anyway.