Congress is closer than it has ever been to revoke and replace the Medicare physician-payment system. Yet with March 31 as a deadline for acting on the sustainable growth-rate formula, there are six potential obstacles that could prevent the $200 billion-plus deal discussed by Nancy Pelosi (Minority Leader) and John Boehner (House Keeper).
The bill to repeal SGR (the Sustainable Growth Rate) was introduced on March 19 by the congressional leaders. The formula required substantial payment cuts every year for the past ten years. However, Congress has patched the formula over the years in order to maintain the physician payment steady. The temporary “patch” will expire on March 31 and afterwards doctors will have a 21% decrease in Medicare payment rates.
With the deadline only a week away, the negotiators are making efforts to obtain a lasting repeal for the SGR formula and also find a way to pay for it.
The bill does not take into account a series of components which may be incorporated into the legislative package such as expanding Medicaid parity payments for primary care providers and the extension of the Children’s Health Insurance Program for about 2 or 4 years. The entire package is estimated at $200 billion, of which only $70 billion may be offset by spending cuts. The cuts would be split between Medicare beneficiaries (high income seniors) and provider payments (insurers, hospitals and acute care providers). The remaining cost would be included in the federal deficit.
The factors which can hinder the negotiations are the Children’s Health Insurance Program, the Congressional Budget Office score, poison-pill additions, higher beneficiary cost-sharing, abortion and presidential ambitions.
The SGR negotiations are a rare case of bipartisan deal making. Since Congress begins the difficult toil of passing a 2016 budget, the negotiations could predict a further cooperation. However, Boehner may be put at risk because he has dealt with many insurrections from conservatives. A partner at Rampy Northrup, Stephen Northrup, said that the “careful calibrations” which allowed the deal to occur, could be thrown off by the final negotiations.
Last Friday, on a joint statement, the leaders of Energy and Commerce committees and the House Ways and Means declared that they are struggling to obtain an efficient permanent resolution to the SGR issue and at the same time they are trying to fortify Medicare for their seniors and extend the CHIP (Children’s Health Insurance Program).
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