Physician payment cut averted, but medical groups push for permanent fix

A conference committee agreement will delay by 10 months a 27.4 percent payment cut to the physician Medicare payment rate that was scheduled to take effect on March 1. The House-Senate committee charged with writing a bill extending the payroll tax reduction brokered the deal.

While more negotiating may take place on the agreement, lawmakers are expected to vote on Feb. 17.

Doctors and medical societies have waged a long campaign to get the sustainable growth rate (SGR) – the formula used to calculate Medicare’s physician payment rate – repealed. They believed that this time around they had a good chance of success, but the deal on the table only continues the history of postponement that doctors abhor.

“The House and Senate conference committee agreement averts a 27 percent cut on March 1, but it represents a serious missed opportunity to permanently replace the flawed Medicare physician payment formula and protect access to care for military families and seniors,” said Peter Carmel, MD, president of the American Medical Association, in a statement released Feb. 15. “People outside of Washington question the logic of spending nearly $20 billion to postpone one cut for a higher cut next year, while increasing the cost of a permanent solution by about another $25 billion.”

The SGR patch would cost about $20 billion, according to Kaiser Health News. To pay for the postponement in the cut, the dealmakers will slash $21.1 billion from federal healthcare spending.

According to The Hill, the tentative savings will be generated by a $5 billion cut to the Affordable Care Act’s $15 billion prevention trust fund; elimination of $2.5 billion in Medicaid payments to Louisiana resulting from Hurricane Katrina; nearly $11 billion in cuts to hospitals; and Medicare payment reductions for clinical laboratory tests.

Even if there is relief at the aversion of the looming 27.4 percent cut, associations representing doctors and hospitals are not overjoyed by the proposed deal.

“We are deeply disappointed that Congress chose to just do another patch – kicking the can, growing the problem and missing a clear opportunity to protect access to care for patients,” Carmel added.

“We are deeply disappointed that Congress has missed a unique opportunity to repeal the SGR once and for all and instead has chosen political expediency over patients,” said a statement released by the Medical Group Management Association.

The American Hospital Association and some of its members were in Washington on Feb. 15 lobbying lawmakers to eliminate the proposed cuts to hospitals.

Follow Stephanie Bouchard on Twitter @SBouchardHFN.

Add new comment