The principal obstacle to a permanent reform of the dreaded sustainable growth rate (SGR) formula that governs updates to Medicare physician payments has been the price tag. Good news! It just got cheaper, by almost half, reports Paige Cunningham of POLITICO.
Efforts to finally get rid of that dreaded Medicare payment formula could see smoother sailing now that the Congressional Budget Office has sliced the price tag nearly in half. [...]
The CBO downgraded the cost of repealing the flawed formula from $243.7 billion to $138.3 billion. That significantly lightened the load for lawmakers who agree that they’ve got to scrap the formula but have been gridlocked for years over how to pay for it. Without a permanent solution, they frantically search for a last-minute, short-term “doc fix” year after year. [...]
Virtually everyone agrees the SGR formula must be fixed once and for all so that Medicare providers no longer face uncertainty about precipitous drops in reimbursement year after year. Congress narrowly averted a scheduled 27 percent cut that was to have taken effect on Jan. 1, but there’s another 25 percent cut looming next year.
As the piece conveys, several doc fix proposals are circulating on the Hill. Others, as well as background on the issue, are offered in a Health Affairs/RWJF policy brief. See also the recent Kaiser Family Foundation compendium of Medicare reform ideas. Note, however, the price tags in these documents are no longer accurate. It’s far lower.
My hope is that any permanent doc fix also fixes the distorted distribution of payments across physician types, about which I’ve written several times recently. Not to take this opportunity to begin to realign payment with more efficient and sensible practice (e.g., more for primary care, less for specialists) would be a tragedy.
I wonder if a doc fix could pay for itself if it also substantially reformed the resource-based relative value scale (RBRVS) system that governs the relative rates Medicare and many private insurers pay physicians. After all, there is a connection between payments (and their distribution by provider type) with physician workforce (and its distribution by provider type). There is a connection between workforce (and distribution) and nature and volume of care. Consequently, an RBRVS reform must have some effect on aggregate spending. Anybody done work to figure out what that might be?
UPDATE: Added last paragraph.