SGR Fix Unlikely; 30% Fee Cut Proposed for 2011

Physicians once again find themselves staring at significantly lower Medicare fees for next year, based yet again on the Medicare Sustainable Growth Rate formula.

Under a stop-gap law passed in June, doctors currently are receiving a 2.2% increase in Medicare payments—but only through Nov. 30. In the absence of Congressional action, that increase will be rolled back and the prior pay cut of approximately 21% will go into effect for the month of December.

For 2011, the proposed rule projects an additional 6.1% cut, starting on Jan. 1. “This means that under current law—that is, in the absence of additional legislative action—if a service is performed on Nov. 1 and Jan. 1, the payment for Jan. 1 will be about 30% lower” than the Nov. 1 payment, explained Ellen Griffith-Cohen, a spokesperson for the Centers for Medicare and Medicaid Services.

Associations and policy makers say that they expect Congress to once again address the pay cut before it goes into effect on Nov. 30. But there is a consensus that the temporary fixes are no longer the answer.

The American Academy of Pediatrics fully supports the American Medical Association and other groups in wanting the SGR fixed, said Dr. Marion Burton, the academy's president-elect.

Dr. Burton, who is a practicing pediatrician in Columbia, S.C., said that although pediatricians don't have many Medicare patients, Medicare payment rates greatly affect them because many Medicaid agencies, Medicaid management companies, and commercial and government payers set their rates on the basis of Medicare's fee schedule. “So if the reduction were to come into play, that would affect pediatricians and the patients they care for.”

There are provisions in the Affordable Care Act which increase the Medicaid payment rates to Medicare's level, but Dr. Burton said the increases won't be much if Medicare rates decline. Meanwhile, both Democrats and Republicans in Congress are vying to be the party to fix the SGR formula. But there's doubt about any change in the Medicare payment system this year.

Back in June, when the House passed the 6-month SGR delay, Rep. Frank Pallone (D-N.J.) addressed the Republicans when they spoke of a permanent fix.

“When you talk about how we have a problem, well, I don't see you helping us out,” he said.

“Don't kid those doctors and make them think you're going to vote for a permanent fix. You're never going to do it. You're not helping at all.”

By law, CMS officials are required to adjust physician payments according to the SGR formula, which calculates physician payments based in part on the gross domestic product.

Over the years, Congress has stepped in to eliminate scheduled pay cuts under the formula. However, because the SGR formula has not been altered, physicians will soon face significant pay cuts unless Congress acts to change or replace the SGR.

CMS officials have repeatedly stressed their commitment to work with Congress to change the payment update formula for physicians' services, Ms. Griffith-Cohen of CMS said.

Without Congressional action, Ms. Griffith-Cohen explained, Medicare is required to follow the SGR formula.

Dr. Ardis Hoven, chairman of the AMA Board of Trustees, said in a statement that the “current index is woefully outdated and understates the growing gap between Medicare payments and the cost of caring for seniors.”

But according to the AMA, the 1,250-page proposed rule has some bright spots.

Dr. Hoven said in her statement that she was pleased to see in the rule “that there is a consensus on the need to update the government index of medical practice costs to reflect the current cost.”

According to the proposed rule, CMS intends to convene a technical panel to review all aspects of the Medicare Economic Index.

The rule is open for comment until Aug. 24. To comment, visit www.regulations.gov

Physicians once again find themselves staring at significantly lower Medicare fees for next year, based yet again on the Medicare Sustainable Growth Rate formula.

Under a stop-gap law passed in June, doctors currently are receiving a 2.2% increase in Medicare payments—but only through Nov. 30. In the absence of Congressional action, that increase will be rolled back and the prior pay cut of approximately 21% will go into effect for the month of December.

For 2011, the proposed rule projects an additional 6.1% cut, starting on Jan. 1. “This means that under current law—that is, in the absence of additional legislative action—if a service is performed on Nov. 1 and Jan. 1, the payment for Jan. 1 will be about 30% lower” than the Nov. 1 payment, explained Ellen Griffith-Cohen, a spokesperson for the Centers for Medicare and Medicaid Services.

Associations and policy makers say that they expect Congress to once again address the pay cut before it goes into effect on Nov. 30. But there is a consensus that the temporary fixes are no longer the answer.

The American Academy of Pediatrics fully supports the American Medical Association and other groups in wanting the SGR fixed, said Dr. Marion Burton, the academy's president-elect.

Dr. Burton, who is a practicing pediatrician in Columbia, S.C., said that although pediatricians don't have many Medicare patients, Medicare payment rates greatly affect them because many Medicaid agencies, Medicaid management companies, and commercial and government payers set their rates on the basis of Medicare's fee schedule. “So if the reduction were to come into play, that would affect pediatricians and the patients they care for.”

There are provisions in the Affordable Care Act which increase the Medicaid payment rates to Medicare's level, but Dr. Burton said the increases won't be much if Medicare rates decline. Meanwhile, both Democrats and Republicans in Congress are vying to be the party to fix the SGR formula. But there's doubt about any change in the Medicare payment system this year.

Back in June, when the House passed the 6-month SGR delay, Rep. Frank Pallone (D-N.J.) addressed the Republicans when they spoke of a permanent fix.

“When you talk about how we have a problem, well, I don't see you helping us out,” he said.

“Don't kid those doctors and make them think you're going to vote for a permanent fix. You're never going to do it. You're not helping at all.”

By law, CMS officials are required to adjust physician payments according to the SGR formula, which calculates physician payments based in part on the gross domestic product.

Over the years, Congress has stepped in to eliminate scheduled pay cuts under the formula. However, because the SGR formula has not been altered, physicians will soon face significant pay cuts unless Congress acts to change or replace the SGR.

CMS officials have repeatedly stressed their commitment to work with Congress to change the payment update formula for physicians' services, Ms. Griffith-Cohen of CMS said.

Without Congressional action, Ms. Griffith-Cohen explained, Medicare is required to follow the SGR formula.

Dr. Ardis Hoven, chairman of the AMA Board of Trustees, said in a statement that the “current index is woefully outdated and understates the growing gap between Medicare payments and the cost of caring for seniors.”

But according to the AMA, the 1,250-page proposed rule has some bright spots.

Dr. Hoven said in her statement that she was pleased to see in the rule “that there is a consensus on the need to update the government index of medical practice costs to reflect the current cost.”

According to the proposed rule, CMS intends to convene a technical panel to review all aspects of the Medicare Economic Index.

The rule is open for comment until Aug. 24. To comment, visit www.regulations.gov

Physicians once again find themselves staring at significantly lower Medicare fees for next year, based yet again on the Medicare Sustainable Growth Rate formula.

Under a stop-gap law passed in June, doctors currently are receiving a 2.2% increase in Medicare payments—but only through Nov. 30. In the absence of Congressional action, that increase will be rolled back and the prior pay cut of approximately 21% will go into effect for the month of December.

For 2011, the proposed rule projects an additional 6.1% cut, starting on Jan. 1. “This means that under current law—that is, in the absence of additional legislative action—if a service is performed on Nov. 1 and Jan. 1, the payment for Jan. 1 will be about 30% lower” than the Nov. 1 payment, explained Ellen Griffith-Cohen, a spokesperson for the Centers for Medicare and Medicaid Services.

Associations and policy makers say that they expect Congress to once again address the pay cut before it goes into effect on Nov. 30. But there is a consensus that the temporary fixes are no longer the answer.

The American Academy of Pediatrics fully supports the American Medical Association and other groups in wanting the SGR fixed, said Dr. Marion Burton, the academy's president-elect.

Dr. Burton, who is a practicing pediatrician in Columbia, S.C., said that although pediatricians don't have many Medicare patients, Medicare payment rates greatly affect them because many Medicaid agencies, Medicaid management companies, and commercial and government payers set their rates on the basis of Medicare's fee schedule. “So if the reduction were to come into play, that would affect pediatricians and the patients they care for.”

There are provisions in the Affordable Care Act which increase the Medicaid payment rates to Medicare's level, but Dr. Burton said the increases won't be much if Medicare rates decline. Meanwhile, both Democrats and Republicans in Congress are vying to be the party to fix the SGR formula. But there's doubt about any change in the Medicare payment system this year.

Back in June, when the House passed the 6-month SGR delay, Rep. Frank Pallone (D-N.J.) addressed the Republicans when they spoke of a permanent fix.

“When you talk about how we have a problem, well, I don't see you helping us out,” he said.

“Don't kid those doctors and make them think you're going to vote for a permanent fix. You're never going to do it. You're not helping at all.”

By law, CMS officials are required to adjust physician payments according to the SGR formula, which calculates physician payments based in part on the gross domestic product.

Over the years, Congress has stepped in to eliminate scheduled pay cuts under the formula. However, because the SGR formula has not been altered, physicians will soon face significant pay cuts unless Congress acts to change or replace the SGR.

CMS officials have repeatedly stressed their commitment to work with Congress to change the payment update formula for physicians' services, Ms. Griffith-Cohen of CMS said.

Without Congressional action, Ms. Griffith-Cohen explained, Medicare is required to follow the SGR formula.

Dr. Ardis Hoven, chairman of the AMA Board of Trustees, said in a statement that the “current index is woefully outdated and understates the growing gap between Medicare payments and the cost of caring for seniors.”

But according to the AMA, the 1,250-page proposed rule has some bright spots.

Dr. Hoven said in her statement that she was pleased to see in the rule “that there is a consensus on the need to update the government index of medical practice costs to reflect the current cost.”

According to the proposed rule, CMS intends to convene a technical panel to review all aspects of the Medicare Economic Index.

The rule is open for comment until Aug. 24. To comment, visit www.regulations.gov