Congress appears ready to punt on physician payment fix

Congress isn't likely to fix the way Medicare physicians are paid before the end of March, when current provisions expire.

With only a half-month of legislative days remaining on the calendar before the deadline, Congress will need to step in with a temporary solution to avoid a 21 percent Medicare reimbursement cut that would otherwise take effect April 1. After a House Energy and Commerce subcommittee hearing Jan. 21-22, there have been no discernable signs of progress on how to permanently repair the Sustainable Growth Rate system.

Rep. Paul Ryan (R-Wis.), chairman of the House Ways and Means Committee, acknowledged last week at a meeting of the Federation of American Hospitals that Congress would probably "buy time" with a patch in order to line up an enduring payment system later in the year.

The most likely scenario at the moment is a 4- to 6-month patch, according to Rep. Tom Price, MD (R-Ga.), House Budget Committee chairman. Full repeal could be tied to extension funding for the Children's Health Insurance Program, which will run out of money at the end of September, Price told attendees at the American Medical Association's advocacy meeting in late February.

But formulating a plan to tie SGR to CHIP would also be problematic because of timing issues. State budgets usually begin July 1, and lawmakers will want to know at that time whether CHIP funding would be available. Linkage to SGR in the fall timeframe could cause states to cut back CHIP programs in the interim and set the stage for further political wrangling.

Meanwhile, Health and Human Services Secretary Sylvia Burwell, who also spoke at the AMA meeting, said funding for a permanent SGR fix is included in the Obama administration's budget proposal for fiscal year 2106. That budget is still subject to review and revision, however.

"We’re hopeful that’s something that can be done in full, and that’s why we put [forward] the proposal, not a temporary fix, but the permanent fix that I think we all know is what we need,” said Burwell.

Overall, the problem isn't disagreement over what needs to be done; the House and Senate introduced identical bills last year to repeal and replace the SGR formula. The divergence comes from how to pay for it.

And the cost of waiting continues to go up. The Congressional Budget Office last month estimated direct spending outlays of $174.5 billion for the period of 2015-2025 to offset SGR repeal and replacement. That figure, about $30 billion higher than a previous projection, includes bonuses for providers who participate in alternative payment models.

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