House and Senate lawmakers have agreed on a five-year plan to change how physicians are paid for treating Medicare patients, an issue that has created a recurring scramble in Congress for over a decade.
Under the deal announced Thursday, Medicare would increase the amount it pays physicians by 0.5% each year for the next five years. The agreement was the result of talks that included the top members of the Senate Finance, House Energy and Commerce, and House Ways and Means committees.
The new bill would also offer bonuses to health-care providers that agree to have their reimbursements based more on outcomes than on the volume of services they provide.
The rates, a perennial issue in Congress since the early 2000s, stem from a 1997 budget law aimed at restraining the growth of Medicare payments. That law set a formula for physician rates that tied payment increases to economic growth, but when health-care costs rose faster than the economy, Congress began to override the formula, in what became known as the “doc fix.”
I’m not opposed to any of this. There was no way they’d ever let the SGR kick in and reduce reimbursement to docs overnight by twenty-some percent. There would be a revolt. Plus, the slowdown in medical spending growth makes the projected cost of this as good as it’s going to get for a while.
But what I find amazing is this: This bill will “cost” something like $150 billion. I put that in quotes because I’ve never believed that it would actually go into effect. Regardless, Congress is going to pass something that will add $150 billion to future spending. For doctors’ salaries? Sure! No problem.
Remember this the next time they say there’s no money in the budget for something, especially when that something is healthcare related. I’m thrilled that they finally acknowledge that sometimes good things cost money.
UPDATE: Dan Munro reminds me that there is still far to go before this becomes law.
— Dan Munro (@DanMunro) February 7, 2014