2014
President Obama and his administration like to tell us how they have strengthened and protected Medicare. In fact, when it comes to one of the major cost drivers the opposite is true. The Administration and Congress act in a cowardly manner. Medicare is at greater risk because our Congress cannot even allow its own laws to be implemented or adopt a viable alternative to address long-term costs and physician reimbursement modernization. On April 2, CMS released this press notice:
President Obama Signs the Protecting Access to Medicare Act of 2014
On April 1, 2014, President Obama signed into law the Protecting Access to Medicare Act of 2014. This new law prevents a scheduled payment reduction for physicians and other practitioners who treat Medicare patients from taking effect on April 1, 2014. This new law maintains the 0.5 percent update for such services that applied from January 1, 2014 through March 31, 2014 for the period April 1, 2014 through December 31, 2014. It also provides a zero percent update to the 2015 Medicare Physician Fee Schedule (MPFS) through March 31, 2015.
Now read what the last report from the Medicare Trustees says: (Figures referenced are not shown)
The financial outlook for Medicare is also uncertain because some provisions of current law that are designed to reduce expenditures may be difficult to sustain. The clearest example of this issue is the sustainable growth rate (SGR) formula for physician fee schedule payment levels. The projections in this report assume that, as required by current law, CMS will implement a reduction in Medicare payment rates for physician services of almost 25 percent at the start of 2014. However, it is a virtual certainty that lawmakers, cognizant of the disruptive consequences of such a sudden, sharp reduction in payments, will override this reduction as they have every year since 2003…
Given these uncertainties, future Medicare costs could be substantially higher than shown in the Trustees’ current-law projection. At a minimum, readers should not assume that the SGR- related payment rate reductions will take place. Figure I.1 illustrates how Medicare’s costs would increase from the Trustees’ current-law projections under two alternative scenarios.
Figure I.1 shows the extent to which the current-law Medicare cost projections depend on the SGR reductions to physicians’ payment rates and on the ACA-mandated reductions in other Medicare payment rates. The figure illustrates scenarios in which the scheduled SGR reductions are overridden so that physicians’ payment rates increase at a 0.7-percent annual rate from 2014 through 2022, or roughly 1 percent more slowly than the Medicare Economic Index (MEI). This assumption reflects the average Medicare physician fee schedule payment update that occurred from 2004 through 2013, a period during which SGR reductions were consistently overridden by legislative action. From 2023 through 2037 (after the short-range valuation period has ended), the payment updates in this scenario are assumed to gradually rise so that Medicare expenditures per beneficiary for physician services are increasing at the same rate as per capita national health expenditures by 2037.
A President exercising leadership would not have signed this legislation, but rather would have rejected this stop gap (for the 11th time) kicking the can down the road and told Congress to go back and fix and reconsider the 2014 agreed to alternative to the SGR. See below.
The three authorizing committees with jurisdiction over Medicare Part B physician services reached an agreement and unveiled a package to repeal the sustainable growth rate formula (SGR). The legislation, H.R. 4015/S. 2000, the SGR Repeal and Medicare Provider Payment Modernization Act, reflects a compromise among the Senate Finance, House Ways and Means, and House Energy and Commerce Committees. This legislation would repeal the SGR, provide a five year .5 percent update and transition physicians to a more value-based payment system.
.
QUINNSCOMMENTARY 