Medicare cut looms

December 15, 2011

While physicians who treat Medicare patients are confronting a drastic pay cut Jan. 1, a number of legislators are scrambling, again, to block the scheduled reduction with a permanent solution.

Washington, DC _ While physicians who treat Medicare patients are confronting a drastic pay cut Jan. 1, a number of legislators are scrambling, again, to block the scheduled reduction with a permanent solution.

The cut-this time estimated at 27.4%-is mandated under a federal sustainable growth rate (SGR) formula designed to contain Medicare costs.

That formula, which sets unrealistic physician expenditure targets, has called for cuts to physician fees since 2002, although Congress has blocked the cut every year since 2003.

Now, a group of Republican physicians in the House of Representatives are pledging they will not break for the Christmas holiday until they find a permanent "fix" to the SGR problem.

"They aren't even going to let a temporary fix go into effect," said Cathy G. Cohen, vice president of governmental affairs for the American Academy of Ophthalmology (AAO). "Their holidays are on the line."

The so-called "GOP Doc Caucus" reiterated its commitment to Cohen and representatives of other medical groups Dec. 1 after learning from the Congressional Budget Office (CBO) that the 2-year solution they had backed now was estimated to cost $38 billion-$14 billion more than they had thought.

"It was a devastating blow," she said.

Under House rules, the members would have to find enough cuts in other parts of the government budget to compensate for the cost of this bill-now a much more daunting task.

"It's not clear how they will find 'pay-fors' but they will look," Cohen said.

The Republicans said they could cut some of the $10 billion allocated in the health-care reform legislation for the Center for Medicare and Medicaid Innovation (CMMI), but Cohen predicted the Democrats would never agree to that.

"Hopefully, we don't get caught in a partisan fight over this," she said.

Democrats in the Senate hope to use some of the war funding saved by President Obama's planned troop withdrawal from Iraq to solve the SGR crisis.

However, the Republicans will resist any cut in military funding, she explained.

"One of the biggest challenges is finding a bipartisan offset for this fix," Cohen said. "Nobody wants to add to the deficit."

The AAO, American Society of Cataract and Refractive Surgery (ASCRS), and other physicians' groups had hoped that the bipartisan Joint Select Committee on Deficit Reduction (the "super committee") would find a way to replace the SGR as part of its massive overhaul of the budget.

The failure of that effort in late November set in motion a set of mandatory, across-the-board budget cuts to begin in 2013.

Under those cuts, Medicare provider fees would be cut about 2%, with additional cuts to payments for graduate medical education, Cohen said.

"We'd rather any cuts be done surgically," she said, with cuts made to imaging services.

The groups worked to block a Medicare Payment Advisory Commission (MedPAC) proposal to replace the SGR with a payment structure that would freeze payments to primary-care physicians and health-care professionals over 10 years, while reducing payments to all other physicians by 5.9% per year between 2012 and 2014. Following that period, payment rates to specialists-including ophthalmologists- would be frozen for 7 years.

They won support from 94 representatives, who argued in a Nov. 16 letter to House leaders that such a plan would cause specialists to reduce the number of Medicare patients they treat and threaten access to care. It also would erase the work by numerous physicians' groups-including AAO-to lead and support outcomes-based initiatives designed to improve care and lower costs.

"Simply put, MedPAC's recommendation fails to value the role that all providers have in the continuum of care, and, if implemented, the impact on access to care for millions of Americans would be devastating," states the letter, signed by 56 Republican and 38 Democrat representatives.