Obama on the SGR Physician Payment Formula

Solo Doctors and and Small Group Practices May Benefit

By Staff Reporterscoins3

According to Diana Manos of Healthcare Finance News, on March 23, 2009, small medical group practices and solo and/or independent physicians may benefit most from the recently proposed Obama healthcare budget. In it, President Obama asked Congress for $76.8 billion for the Department of Health and Human Services [DHHS] for fiscal year 2010. Some funding would come from changes to the way healthcare is provided, with a new emphasis on pay-for-performance [P4P] for Medicare providers.

The AMA’s Response   

It was reported that, Joseph M. Heyman, MD, chairman of the American Medical Association’s Board of Trustees, said the AMA is pleased with the administration’s proposed new baseline – or projected spending over a period of time – or Medicare physician payment updates.

“Unlike previous budget forecasts, the administration’s new budget baseline recognizes that Congress needs to and will act to avert the serious access crisis that looms as physicians face drastic payment cuts in the coming decade due to the failed Medicare physician payment formula,” he is reported to have said. Furthermore,  

“The AMA strongly supports the use of a realistic baseline as a foundation for Congress to move forward with a permanent solution to the flawed SGR physician payment formula, and urges the committee and Congress to ensure that a new Medicare physician payment baseline is adopted in the 2010 Fiscal Year (FY) Budget Resolution.”


Under the president’s budget request, Medicare Advantage would be revamped; physicians and hospitals could expect to be paid for performance [P4P] under Medicare; pharmaceutical companies would face steeper competition from generic drug companies and the government would clamp down on inadvertent and fraudulent overpayments under Medicare. The budget also calls for “comprehensive, but fiscally responsible reforms” to the physician payment formula [Sustainable Growth Rate], moving toward rewarding doctors for efficient quality care.

Link: http://www.healthcarefinancenews.com/news/small-physician-practices-can-expect-real-changes-healthcare-under-obama-budget


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59 Responses

  1. Physicians would receive a 21.5% cut to their Medicare payments starting Jan. 1, 2010, under a proposed rule issued by the CMS. In a major step to revise the way it pays physicians, the agency is also proposing to remove physician-administered drugs from the formula used to calculate Medicare’s physician fee schedule. The proposal to take drugs out of the formula won’t prevent the anticipated cut in 2010; however, physicians will experience fewer years of negative updates if it is implemented.

    The American Medical Association, which has been pushing for this measure for years, applauded the proposal. “The removal of physician-administered drugs from the broken Medicare physician payment formula is a major victory for America’s seniors and their physicians,” J. James Rohack, president of the AMA, said in a written statement. “The AMA has been calling for this action since 2002 so that Congress can afford to repeal the flawed Medicare physician payment formula.”

    The sustainable growth rate formula ties Medicare physician payments to several factors, including changes in the economy. Physicians would experience the 21.5% cut in 2010 unless Congress intervenes, as it has in the past.

    Source: Jennifer Lubell, Modern Healthcare [7/1/09]


  2. We told you so,

    The physician that Barack Obama consulted on medical matters for over two decades said that the president’s vision for health care reform is bound for failure.


    Can anyone out there refute him; or is he correct?



  3. Jennifer and Jerald,

    The Social Security Advisory Board just released a report calling on policymakers to find lasting solutions to the long-term problem of escalating healthcare costs.


    Now, is anyone surprised?



  4. The Senate, next week, is set to consider a measure that would effectively wipe out the Medicare physician payment formula, reversing years of threatened cuts and clearing the way for a new reimbursement structure.

    The American Medical Association, the American College of Surgeons and about a half-dozen more physician groups met with Senate and White House leaders to lend their support to a measure being pushed by Sen. Debbie Stabenow (D-MI).

    Under her proposal, the sustainable growth-rate formula—which annually calls for steep, double-digit physician pay cuts—would be replaced with a new formula being implemented at some point, according to a source who attended the meeting. Erasing the SGR would add about $240 billion to the deficit over the next decade, giving some lawmakers pause.

    Source: Matthew DoBias, Modern Healthcare [10/15/09]


  5. Congress will lose credibility if it fails to swiftly approve legislation that will fix Medicare’s troubled payment system for doctors, according to Nancy Nielsen, immediate past president of the American Medical Association.

    Lawmakers promised Medicare seniors that they will continue to have access and choice, said Nielsen, who joined leaders from AARP and the Military Officers Association of America in the teleconference. “If they fail to fulfill that promise, it calls into question Congress’ ability to fulfill future commitments on [health] reform,” she said.

    The House as early as Wednesday will begin consideration of the Medicare Physician Payment Reform Act of 2009, a measure that would prevent a scheduled 21.2% rate decrease set to take effect next year by revamping Medicare’s sustainable growth-rate, or SGR, formula, which sets payments for doctors under the program. Such a reduction would force doctors to limit the number of Medicare and Tricare patients they treat, Nielsen said.

    Source: Jennifer Lubell, Moderm Healthcare [11/17/09]


  6. AARP … UGH!
    They are just a marketing and left wing liberal commission driven intermediary shill for UHCG.



  7. House Passes H.R. 3961—Legislation to Permanently Repeal the SGR

    By a vote of 243-183, the U.S. House of Representatives just passed H.R. 3961, a bill that repeals the current Medicare physician payment formula, known as the sustainable growth rate (SGR), and replaces it with a new framework. Michael Burgess, MD, (R-TX), a former AMA alternate delegate was the sole Republican to vote for final passage.

    Source: AMA Health System Reform Bulletin [11/19/09]


  8. More on the ‘doc fix’, from The Hill

    With healthcare reform efforts on hold, Medicare ‘doc fix’ looms large, once again:




  9. Obama Budget Freezes Physicians’ Medicare Pay for 10 Years

    President Obama promised spending freezes during his first State of the Union address, but his $3.8 trillion fiscal 2011 budget request still would protect physicians from Medicare pay cuts and extend enhanced federal support for state Medicaid programs.

    Obama’s proposal, unveiled Feb. 1, sets aside $371 billion over a decade to pay for the cost of preventing Medicare pay cuts under the sustainable growth rate formula. But, the funding would only be enough to turn annual reductions into rate freezes, not to fund pay raises.

    Also, the president left the specifics of how to prevent the cuts up to Congress, said Jonathan Blum, director of the Centers for Medicare & Medicaid Services Center for Medicare Management.

    Source: Doug Trapp, AMNews [2/8/10]


  10. One-month Reprieve on Doc Pay Cut

    Physicians will get a one-month reprieve from a scheduled Medicare pay cut, and a number of safety net healthcare programs will see some breathing room before they expire under a deal struck between a holdout senator and Democratic leaders.

    The Senate voted late Tuesday 78-19 to approve a bill that extends by one month doctor payments, COBRA premium subsidies, insurance for the unemployed, and rural Medicare provisions that went dark on March 1. President Barack Obama quickly signed the bill.

    The bill costs roughly $10.2 billion, but because most of it was considered emergency spending, lawmakers did not need to offset that amount.

    Source: Matthew DoBias, Modern Healthcare [3/3/10]


  11. Medicare Pay Patches Persist as Medicine Demands Long-term Fix

    Even before President Obama signed an extension bill that reverses until April 1st. an unprecedented 21% Medicare physician pay cut, the Senate had begun work on the next short-term patch — this one to delay the rate reduction until October 1st.

    The Tax Extenders Act, which essentially is a longer-term version of the Temporary Extension Act from March 2, was approved by the Senate on March 10 with a vote of 62-36, sending the measure to the House. The roughly $148 billion bill also would extend a number of other unemployment and healthcare assistance programs through the end of the year.

    The pursuit of yet another short-term reprieve, again for less than a year, runs counter to the American Medical Association’s call for a permanent repeal of the sustainable growth rate formula that helps determine Medicare physician pay rates.

    Source: Chris Silva, AMNews [3/15/10]


  12. Congress Fails to Prevent April 1 Cut in Medicare Physician Payments

    On Thursday, the U.S. Senate held floor debate on a bill, H.R. 4851, that would extend a number of expiring programs through April. That bill, which had already passed the U.S. House of Representatives, includes a 30-day extension of current Medicare physician payment rates, postponing once again the 21.3 percent cut scheduled to take effect this year. It also addresses a number of other programs such as extensions of COBRA benefits and unemployment insurance benefits for Americans who have lost their jobs.

    Congress failed to act yet again, and as a result, the 21.3 percent Medicare physician payment cut will take effect on April 1. The AMA has contacted the Centers for Medicare and Medicaid Services (CMS), and they will be making an announcement shortly about their plans for handling the situation. Judging from past experience, CMS will not be forced to process claims at the reduced payment rates for 10 business days.

    Source: AMA e Voice Alert [3/26/10]


  13. Senate Debate on Payment Extension Concludes

    Yesterday, the Senate passed an amended version of HR 4851, the Continuing Extension Act of 2010, by a vote of 59-38. This legislation would avoid the 21.3 percent Medicare physician payment cut by extending 2009 rates through the end of May, as well as address other expiring programs such as extended unemployment and COBRA benefits for individuals who have lost their jobs.

    An earlier version of this legislation passed the House in March before the spring congressional recess, but passage was blocked in the Senate due to controversy over the bill’s designation as an emergency measure that would not require budgetary offsets.

    Because the versions of H.R. 4851 passed by the House and Senate differ, the revised legislation must be sent back to the House for approval, perhaps as early as this evening. In any event, it is expected that both the House and Senate will complete action by the end of this week on a bill that will retroactively restore Medicare payment levels to where they were on March 31, and extend 2009 payment rates through May 31.

    Source: AMA eVoice Alert [4/15/10]


  14. For the third time this year, Congress has just days to avert a scheduled 21 percent cut in pay to doctors who treat seniors and others on the Medicare program.

    And, while just about everyone agrees a cut of that magnitude would be devastating for Medicare and the patients it serves, no one seems to be able to figure out how to solve the problem in anything except a stopgap way.




  15. House Advances Short-Term SGR Relief

    Here we go again!

    The U.S. House of Representatives plans to vote on an “extenders bill” that is expected to include a new proposal to avert the 21 percent cut in Medicare physician payments that is scheduled to take effect on June 1. Elements of the proposal, include:

    – A 1.3 percent Medicare payment update for the remainder of 2010

    – A 1.0 percent payment update in 2011

    – Updates for 2012-13 established under two expenditure targets

    – The SGR formula resuming in 2014 to reflect current law

    The two expenditure targets are patterned after those proposed in H.R. 3961, which passed the House last year. An expenditure target for evaluation and management and preventive services will be set at gross domestic products (GDP) plus two percentage points; a separate expenditure target for all other physician services will be set at GDP plus one percentage point. These targets are more generous than the current sustainable growth rate (SGR), which is set at GDP with no additional growth allowance. During the two-year period when the twin targets are in place, an update floor will be set at zero to prevent any conversion factor cuts in 2012-13.

    Source: AMA eVoice Alert [5/20/10]


  16. Vote Rescinds Medicare Physician Payment Cut‏

    Language regarding the postponement of the Medicare physician payment cut for 2010 was just approved by the House of Representatives by a vote of 245 to 171. While this bill will not repeal the SGR, it would delay the schedule June 1, 2010 cut to physician payment rates under Medicare until 2012.

    Click to access alert5_2010.pdf

    However, the Senate will not vote on the physician payment legislation until reconvening on June 7, 2010

    Source: Health Capital Consultants LLC


  17. ‘Doc Fix’ Clears House; Cuts Still Loom

    The House just voted 215-204 to approve a greatly pared-down legislative package that includes a $4.5 billion Medicare cut to hospitals, and separately 245-171 to replace a 21.2% cut in physician payments with 19 months of positive updates.

    Even so, the House action on the so-called “doc fix” for Medicare physican reimbursement could prove toothless in the short-term. The Senate adjourned early last Friday without taking up either bill, meaning the soonest they’ll consider the measures is after their week-long Memorial Day recess.

    The doc pay cuts officially take hold on June 1, but CMS said it would hold claims for at least 10 days. Under the $22.9 billion physician payment measure, doctors would see a 2.2% update for the balance of the year, and a 1% increase in 2011. But they’ll face a 33% cut in 2012.

    Source: Matthew DoBias, Modern Healthcare [5/28/10]


  18. Organized Medicine Blasts Congress for Failing to Stop Medicare Pay Cut


    Congress failed to stop a 21.3% cut in Medicare reimbursement for physicians that took effect on June 1st. So, the AMA and organized medicine is dialing up its rhetoric from disapproval to disgust.


    Disgust? – Shame on you, AMA doctors!



  19. That’s a Big Pay Cut … Finally … Maybe!

    The Washington Post reports that doctors with Medicare patients will start seeing a 21 percent pay cut this week after Congress failed to defer the cuts by two more years.


    The Senate had until June 1 to avert the cuts. It is not expected to vote by Tuesday, when the Center for Medicare and Medicaid Services’ temporary hold on Medicare claims expires.



  20. CMS Will Process Claims on Friday June 18, with 21 Percent Cut

    As the clock continues to tick toward the June 18th [today] final deadline for implementation of the 21.3 percent cut in Medicare physician payments produced by the sustainable growth rate (SGR) formula, U.S. Senate debate continued June 17 over H.R. 4213, the American Jobs and Closing Tax Loopholes Act.

    In addition to providing another short-term reprieve from the impending Medicare cut, the legislation would increase federal Medicaid funding and extend various expiring programs, such as disaster relief and long-term unemployment insurance benefits.

    If legislation is not signed into law before the weekend, the Centers for Medicare and Medicaid Services (CMS) will have no option but to instruct its contractors to begin processing Medicare claims for physician services provided in June at rates that reflect the 21.3 percent cut.

    Source: AMA Alert [6/17/10}


  21. On the SGR Conundrum

    Some critics say the SGR pay cut could lead to doctors dropping or refusing to see Medicare patients, and patients having to hunt for new providers to pick up their care. And, the AMA has launched a media campaign to put pressure on Congress to reverse the cuts … AMA “big deal.”

    As a doctor, health economist and physician focused financial advisor, I believe this will not happen; far too many of my colleagues are just too driven … too geedy
    .. and have made too many poor financial choices in life.

    Of course, I do think our impending new book will help those who still wish to work, innovate and actually provide humane and patient-centric health care.

    Visit: http://www.BusinessofMedicalPractice.com

    Dr. David Edward. Marcinko MBA
    [CEO and Founder]


  22. Senate Passes Six-month SGR Fix

    The U.S. Senate passed an amended version of H.R. 3962, now called the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010,” by unanimous consent this afternoon. This legislation provides a 2.2 percent Medicare physician payment update for six months, from June 1 through Nov. 30, in lieu of the 21 percent cut scheduled for 2010.

    Unfortunately, the U.S. House of Representatives is not scheduled to hold any floor votes until the evening of June 22. As a result, the Centers for Medicare and Medicaid Services (CMS) is instructing its carriers to lift the hold on processing claims for services provided on or after June 1, and to begin processing them under the law’s negative update requirement. In other words, claims will begin to be paid today at the 21 percent lower rate on a first-in/first-out flow basis.

    Once H.R. 3962 is passed by the House and signed by President Obama, CMS will retroactively adjust any June claims that have been paid.

    Source: AMA E-Voice Alert [6/18/10]


  23. Senate Passes Six-Month SGR Fix

    Because of the inaction of Congress: “the Centers for Medicare and Medicaid Services (CMS) is instructing its carriers to lift the hold on processing claims for services provided on or after June 1, and to begin processing them under the law’s negative update requirement.” In other words, claims will begin to be paid today at the 21 percent lower rate on a first-in/first-out flow basis.

    I am not sure how many of you realize the financial impact this will have on your practice when it comes to the posting of your claims. First, the claims will be paid at the reduced rate. If you use an automatic posting system, chances are the 21 percent will either be written off by your software program, or billed to the secondary insurance. The secondary insurance company will also pay at a reduced rate. If/when this fix passes and CMS retools to process the claims, you will need a system to add back the 21 percent of Medicare’s allowable and the 21 percent of the secondary’s allowable.

    For some offices, be prepared for some accounting gridlock and possibly paying overtime as your personnel attempt to figure their way out of this quagmire.

    Dr. Richard A. Simmons, DPM
    Rockledge, FL
    Source: PMNews 3,891


  24. AMA Urges CMS to Withdraw MEI Changes

    The CMS should withdraw any changes it has proposed to Medicare’s Economic Index until a comprehensive review of the MEI is completed, the American Medical Association stated in comments to the agency on the proposed physician fee schedule for 2011. The MEI is a measure of inflation used in tandem with the sustainable growth-rate index to set physician payments. The AMA has long requested that the agency revise the MEI, claiming the current formula is outdated and understates the growing gap between Medicare payments and the cost of caring for seniors.

    Specifically, the AMA claims that the CMS’ proposal to divide the MEI’s “office expense” category into smaller subcategories was configured without any real justification. “These revisions do not do anything to improve the adequacy of the MEI,” the organization stated in its comments. For these reasons, the AMA is urging the CMS to withdraw its proposal to rebase and revise the MEI next year, and instead develop a new MEI proposal after the panel conducts its review.

    Source: Jennifer Lubell, Modern Healthcare [8/26/10]


  25. Doctor Pay Slashed

    Physicians are once again staring down the barrel of a two-digit cut in Medicare reimbursement — pay will go down by 21% on Dec. 1, and another 4% cut will be loped off on Jan. 1, according to a final payment rule issued by the Centers for Medicare and Medicaid Services.


    Taken together, “the total reduction in Medicare Physician Fee Schedule rates between November 2010 and January 2011 under the Sustainable Growth Rate system will be 24.9%.


    These reductions can only be averted by an Act of Congress.



  26. Congress Acting?

    Senate Passes One-Month Delay; House Bill for 13-Month Extension Introduced

    Last evening the Senate passed a one-month extension of the current Medicare physician payment rates in an effort to avert a 23 percent cut scheduled to take effect December 1st. The Senate passed HR 5712, the Physician Payment and Therapy Relief Act of 2010, by voice vote, planning to work out a deal on a longer extension in December. The measure now goes to the House, which has adjourned for the week. House Majority Leader Steny H. Hoyer, D-MD., announced Thursday evening that the chamber would take up the measure Nov. 29.

    U.S. Representatives John Dingell (D-MI), Frank Pallone (D-NJ), Pete Stark (D-CA) and Henry Waxman (D-CA) have introduced legislation to extend the current physician Medicare reimbursement rates for 13 months and provide a 1% update for both this year and next year.

    Sources: Jessica Zigmond, Modern Physician [11/18/10]


  27. The Senate and the Doctor SGR Fix?

    The Senate just unanimously passed a bill postponing a 23% cut in Medicare reimbursement to physicians from December 1st 2010 to January 1st, 2011.

    However, physicians will not get the “doc fix” to the Medicare reimbursement crisis that they wanted signed, sealed, and delivered before Thanksgiving [yesterday].

    Congress will reconvene on November 29th, giving the House the opportunity to approve the Senate legislation before the December 1st deadline.


    Is this just more of the same?



  28. UPDATE:
    House Okays Delay on Doc Pay Cut

    By a voice vote without objection, the U.S. House of Representatives voted to stave off a 23% Medicare payment cut to physicians that was scheduled for Dec. 1st.

    House leaders approved Senate amendments to a bill that provides certain clarifications and extensions under Medicare, Medicaid and the Children’s Health Insurance Program.

    A week before the Thanksgiving recess, the Senate voted to delay the cut after Senate Finance Committee leaders Max Baucus (D-MT) and Chuck Grassley (R-IA) had introduced the bill and also said they would work for a more permanent solution. The legislation still requires the president’s signature to become law.

    Source: Jessica Zigmond, Modern Healthcare [11/29/10]


  29. House Vote Sends Doc-Pay Bill to Obama

    The House gave final approval on Thursday to a bill that would avert a 25 percent cut in Medicare payments to doctors by freezing reimbursement rates at current levels until the end of next year. The bill goes now to President Obama, who hailed the action by Congress and promised to sign the legislation.

    The House vote was 409 to 2. The Senate approved the measure by unanimous consent on Wednesday.

    Many doctors had said they would limit the number of their Medicare patients if payments were cut on Jan. 1 under a statutory formula established by Congress. Doctors had sought a small increase in Medicare payments to reflect their rising costs. Still, the American Medical Association thanked Congress for approving the legislation with a one-year delay in the reimbursement cut.

    Source: Robert Pear, The New York Times [12/9/10]


  30. Obama Signs Doc-Pay Legislation

    President Barack Obama just signed the Medicare and Medicaid Extenders Act of 2010 that delays for one year a 25% reduction in Medicare payments to physicians. The cut would have gone into effect January 1st, 2011.

    The cost of delaying the payment cut and extending the current rates for 12 months is estimated at $14.9 billion. This expense will be paid for over a 10-year period by raising caps on how much individuals and families must return if they receive overpayments from healthcare affordability tax credits.

    Source: Andis Robeznieks, Modern Healthcare [12/15/10]


  31. The 20102 Budget Doc-Fix?

    President Obama’s 2012 budget proposal delays a steep cut in Medicare reimbursement rates for doctors by squeezing healthcare payments for a broad cross section of medical providers.




  32. Medicare Panel Recommends 1% Physician Pay Boost in 2012

    Lawmakers should increase Medicare payment rates to physicians and prevent a massive across-the-board cut set for 2012, the Medicare Payment Advisory Commission recommended in its annual March report to Congress. The commission suggested a 1% increase in doctor pay in place of the scheduled reduction. The report was released March 15, days after the Centers for Medicare & Medicaid Services projected that doctor pay faces a 29.5% cut next year under the sustainable growth rate formula.

    The MedPAC recommendation is not binding on Congress, although lawmakers sometimes use the advice as a starting point for congressional negotiations on preventing upcoming pay cuts. The 2012 reduction is the largest that physicians have faced to date.

    Source: Charles Fiegl, AM News [3/21/11]


  33. The ACA

    We physicians are already beginning to see the profoundly adverse effects of the Accountable Care Act.

    This year, the Medicare SGR (sustainable growth rate), which required a 23% reduction in physician reimbursement, was postponed 5 times. The final reprieve, resulted in Congress “kicking the can down the road” until January 2012, when the reduction becomes 29%.

    Dr. Joe


  34. Meaningful Reform May Mean Transitioning From Fee-For-Service Model

    Key lawmakers are expressing support for transitioning away from the current Medicare payment system toward several different pay models. On May 12th, the House Ways and Means health subcommittee held the first in a series of hearings on physician payment in the Medicare system. By starting these hearings early in the year, Rep. Wally Herger (R, CA), the panel’s chair, said he hopes Congress will achieve meaningful payment reform before Medicare doctor rates are cut by nearly 30% on Jan. 1.”I believe that the future of Medicare depends on a transition away from the fragmented fee-for-service system to a system where the incentives are aligned with better patient care, not just more patient care,” Herger said.

    The American Medical Association and other members of organized medicine support repealing the sustainable growth rate mechanism responsible for the impending pay cut. At another committee hearing a week earlier, the Association advocated for a mix of payment models for doctors and physician groups to choose from after a transition period of five years of stable payments under the current fee-for-service system.

    Source: Charles Fiegl, AMNews [5/23/11]


  35. CBO Sees 29.4% Medicare Rate Cut for Docs in January

    Although CMS actuaries have called a 29.4% reduction in physician Medicare payment implausible, a Congressional Budget Office (CBO) report repeated that this would be the cut come January using Medicare’s sustainable growth-rate mechanism.

    The report goes on to explore the costs of different SGR-reform “cliff” and “clawback” options, as well as recommendations by President Barack Obama’s fiscal commission.

    Source: Andis Robeznieks, Modern Physician [6/15/11]


  36. Medicare to Age 67

    Senators Joe Lieberman (I-CT) and Tom Coburn, M.D. (R-OK) just revealed their bipartisan proposal to save Medicare and reduce the debt.

    The Lieberman/Coburn proposal would delay reimbursement cuts for docs for three years, but would raise Medicare eligibility to 67 and increase out-of-pocket expenditures for high earners. The bill would save more than $600 billion over 10 years, based on reviews of Congressional Budget Office (CBO) estimates, and up to an additional $100 billion savings from implementing the program integrity provisions.

    Click here for background material detailing the proposal:


    Ann Miller RN MHA


  37. Ann

    Because it’s required to release a proposed fee schedule that reflects current law, the Center for Medicare & Medicaid Services’ (CMS) proposed rule, released on July 1, includes a 29.5 percent cut to physician fees for 2012.

    This proposed cut represents the 11th of its kind based on the sustainable growth rate (SGR) formula, which the American Medical Association and other physician groups say should be overhauled as part of the deficit reduction process.

    Changing the formula would cost an estimated $300 billion, with the figure rising with each passing year.

    Now, all I can say is: OUCH!

    Dr. David Edward Marcinko MBA


  38. Associations Hail Deficit Plan’s ‘Doc Fix’

    A proposed deficit deal introduced this week by the so-called Gang of Six senators won the praise of representatives of over 750,000 physicians for its inclusion of a 10-year “doc fix” in Medicare payments.

    The bipartisan agreement that would slash deficits by up to $3.7 trillion over the next decade includes a 10-year, $298 billion suspension of Medicare’s sustainable growth-rate formula.

    The agreement, released Tuesday by the senators who have been negotiating for months, called for spending Medicare and Medicaid funds “more efficiently” without disrupting “the basic structure of these critical programs” but offered few specifics about what that means. The physician advocates, including the American Medical Association and the American Academy of Family Physicians, praised the agreement and urged senators to go even further by fully repealing the SGR.

    Source: Rich Daly, Modern Healthcare [7/20/11]


  39. CMS Relies on Biased AMA Data, Docs Allege

    A primary-care physician practice in Augusta, GA has filed federal litigation alleging that, for decades, the CMS has illegally relied on biased advice from the American Medical Association in setting its payment formulas for general and specialty doctors. As a result, the litigating doctors say, the CMS has consistently overpaid specialty doctors relative to primary-care physicians, which has made it more difficult for much-needed general medical clinics to stay in business. The lawsuit was filed by five physicians and a dentist who all work at the Center for Primary Care in Augusta.

    The doctors’ lawsuit filed in U.S. District Court in Baltimore says that since 1992 the CMS has relied on an obscure committee of the AMA known as the Relative Value Scale Update Committee to advise it on how to set Medicare reimbursement rates for various medical specialties based on changes in the cost of providing services.

    Source: Joe Carlson, Modern Healthcare [8/9/11]


  40. No More Doc-Fixes?

    New figures just released by the Congressional Budget Office [CBO] include a budget assumption that almost never comes true … The imposition of steep Medicare cuts for physicians.


    What do you think?



  41. SGR

    Medicare’s actuaries do not believe their own projections are realistic because they were required to assume that a key provision of the current law will take effect as scheduled.

    It would require a 29.4 percent cut in fees for doctors who treat Medicare patients on Jan. 1, 2012.

    So, what are the chances of this really happening?



  42. Supercommittee should ax IPAB

    Kent – Rep. Phil Roe (R-Tenn.) said recently that the deficit-cutting supercommittee should repeal one of the healthcare reform law’s chief cost-control measures; the Independent Payments Advisory Board [IPAB].


    Any thoughts?



  43. MGMA, AAFP Urge Changes on Doc Fee Schedule

    The CMS’ proposed Medicare Part B Physician Fee Schedule for 2012 needs to be revised to relieve information-technology-related administrative burdens on practices and adjust how primary-care services are valued, according to two organizations of healthcare professionals.

    In a 17-page letter to CMS Administrator Dr. Donald Berwick, the Medical Group Management Association argues that if, for example, physicians meet electronic health-record system meaningful-use requirements and qualify for EHR subsidies through the CMS’ IT incentive programs, they should automatically qualify for bonuses under the Physician Quality Reporting System program and be exempt from penalties related to electronic prescribing.

    Source: Andis Robeznieks, Modern Healthcare [9/2/11]


  44. MedPac Mulls ‘Doc Fix’ With No Raises for 10 Years

    The Medicare Payment Advisory Commission (MedPac) is mulling a “doc fix” to the program’s reimbursement crisis that would spread its enormous cost among beneficiaries and providers alike.

    The proposed fix, which would ultimately require Congressional approval, translates into a 10-year freeze of Medicare pay for primary care physicians. Specialists would experience a 5.9% pay cut for 3 straight years, followed by 7 years of no change.

    These austerity measures are part of a proposal prepared by MedPac staff, with the blessing of chairman Glenn Hackbarth, and presented to commission members yesterday.

    Similar to Congress and organized medicine, MedPac wants to avert a 29.5% reduction in Medicare rates on January 1 that is mandated by the program’s sustainable growth rate formula for setting physician reimbursement.

    Source: Robert Lowes, Medscape News [9/16/11]


  45. Is the AMA Breaking the SGR Bank?

    The American Medical Association is putting a lot more money into its push for a new Medicare payment system.




  46. Most Docs Would Limit Access Under SGR Cuts [Survey]

    Just 16% of physician practices would maintain current levels of access to Medicare-backed care if physician payments fall 29.5% as scheduled on January 1st under the sustainable growth-rate formula, according to an analysis of online survey responses by the Medical Group Management Association.

    The survey responses indicate that 51% of practices would reduce available appointments for new Medicare patients if the statutorily mandated SGR cuts go through, and 33% expressed uncertainty about how the cuts would affect their Medicare patients. MGMA conducted the unscientific survey from mid-September through mid-October and received responses from more than 2,176 practices.

    Source: Paul Barr, Modern Physician [10/24/11]


  47. Senate OKs Two-Month Freeze on Doc Pay

    Wrapping up legislative business before the Christmas recess, the Senate just approved legislation that freezes Medicare payments to physicians until Feb. 29th, 2012.

    In a vote of 89-10, the Senate passed an amended version of the House payroll tax bill that the lower chamber approved earlier this week. The legislation from Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KS) – which extends a payroll tax holiday for two months – provides no payment update in Medicare reimbursement levels for the nation’s doctors in January and February 2012, which prevents a 27.4% cut that was scheduled to take effect on Jan. 1.

    Source: Jessica Zigmond, Modern Healthcare [12/17/11]


  48. Opps! House Rejects Senate Tax Measure; Doc Pay Cut Looms

    The threat of a 27.4% cut to Medicare physician payments Jan. 1 became more real today after the House of Representatives voted 229-193 on a motion to disagree with a Senate-amended version of a House payroll tax cut bill that would have placed a two-month freeze on payments to the nation’s doctors.

    In that same vote, the lower chamber requested a conference, which would allow the House and Senate to resolve their differences in the two bills. On Saturday, the Senate approved an amended version of a House payroll tax cut bill that the House passed Dec. 13. Both pieces of legislation would avert the scheduled reduction in Medicare physician payments and extend certain healthcare provisions that are set to expire by year’s end. But while the House version calls for a two-year fix to the sustainable growth-rate formula and provides a 1% update for doctors in 2012 and 2013, the Senate’s amended legislation would place a two-month freeze on physician payments until Feb. 29, 2012.

    Source: Jessica Zigmond, Modern Healthcare [12/20/11]


  49. Obama Signs Measure Averting Doc Pay Cut

    President Barack Obama on Friday signed a payroll tax-cut bill that averts a 27.4% cut in Medicare physician reimbursement. The House of Representatives this morning approved the Temporary Payroll Tax Cut Continuation Act of 2011 by unanimous consent. The law prevents the cut in Medicare physician reimbursement by freezing federal payments to physicians at their current rates for two months.

    Moments earlier, the Senate approved the measure, which also extends for two months a middle-class payroll tax cut, unemployment insurance and the nation’s primary welfare program, Temporary Assistance for Needy Families. The legislation also includes a change that House Republicans wanted on the bill that the Senate approved last weekend to help businesses implement the two-month tax change.

    Source: Rich Daly and Jessica Zigmond, Modern Healthcare [12/23/11]


  50. SGR Repeal Dilemma Could Make Passage Harder

    Repealing Medicare’s sustainable growth rate (SGR) formula for physician pay — a goal that always seems just out of reach — poses a dilemma for lawmakers that could make the measure even harder to pass. The dilemma is described in a study issued last month by the Congressional Research Service (CRS), an arm of the Library of Congress. It states that passage of an ambitious “doc fix” to the Medicare reimbursement crisis would force lawmakers to choose whether Medicare beneficiaries or taxpayers in general would suffer financially from one of the measure’s overlooked consequences.

    The SGR formula had called for a 27.4% cut in Medicare rates on January 1st, but Congress voted in late December to extend the deadline to March 1st. Exasperated by continual short-term postponements of scheduled cuts since 2003, organized medicine has lobbied Congress to replace the SGR formula with one more equitable for physicians. The Congressional Budget Office (CBO) has estimated that junking the SGR and freezing Medicare rates for 10 years would cost roughly $300 billion over that time frame.

    Source: Robert Lowes, Medscape News [1/11/12]


  51. AMA Rips Medicare Pay Deal

    The AMA and other physician groups denounced Congress for failing to find a permanent solution to Medicare’s sustainable growth-rate formula after lawmakers reached a tentative agreement that forces them to revisit the issue at the end of the year. The deal would avert a 27.4% Medicare payment cut to physicians after Feb. 29th and extend current payment rates through the end of 2012, according to a GOP aide.

    “The House and Senate conference committee agreement averts a 27% cut on March 1st, but it represents a serious missed opportunity to permanently replace the flawed Medicare physician payment formula and protect access to care for military families and seniors,” Dr. Peter Carmel, president and CEO of the American Medical Association, said in a statement. “People outside of Washington question the logic of spending nearly $20 billion to postpone one cut for a higher cut next year, while increasing the cost of a permanent solution by about another $25 billion.”

    Source: Jessica Zigmond, Modern Healthcare [2/15/12]


  52. Medicare Doctor Pay Patch Sets Up 32% Cut for 2013

    The 10-month delay of cuts to Medicare physician payment rates leaves Congress in what some see as its toughest spot to date when it comes to preventing deep pay reductions. Physician organizations and other health policy observers said lawmakers missed a major opportunity to pass a long-term solution to the broken Medicare sustainable growth rate formula.

    The pursuit of yet another short-term patch makes attaining a permanent fix to the SGR in 2012 significantly more difficult, with the price of a repeal going even higher above the $300 billion mark and the added pressures of competing for legislative attention in a presidential election year.

    Source: Charles Feigl, AMNews [2/27/12]


  53. IPAB, Med Mal Could See Senate Vote This Week

    A combined measure to establish federal malpractice caps and repeal a controversial Medicare cost control board could come up for a Senate vote as early as this week. The measure, which passed the House of Representatives last week, was formally placed on the Senate’s legislative calendar, although no specific date for a vote has been set.

    Senate observers did not expect the measure to receive a Senate vote because the chamber’s Democratic leadership is strongly opposed to both of its main components. The bill’s supporters were optimistic that it could garner the support of moderate Democrats during an election year because of the unpopularity of the Independent Payment Advisory Board.

    Source: Rich Daly, Modern Healthcare [3/27/12]


  54. Bipartisan House Bill Would Repeal SGR

    Two House members—including one physician—have introduced bipartisan legislation that would repeal the Medicare sustainable growth-rate formula used to pay physicians and avert a more than 30% payment cut to doctors next January. The Medicare Physician Payment Innovation Act from Reps. Allyson Schwartz (D-PA) and Joe Heck (R-NV), a physician trained in emergency medicine, would freeze payments to physicians at 2012 levels through Dec. 31st, 2013.

    It would then provide positive annual increases of 0.5% for all physician services each year for four years. Between the years 2014 to 2017, the bill would provide an annual increase of 2.5% for primary care, preventive and care coordination services that are offered by clinicians for whom 60% of their Medicare charges are for those services.

    Source: Jessica Zigmond, Modern Healthcare [5/9/12]


  55. Medicare, Medicaid Overhaul Deal Unlikely

    Congress is unlikely to reach a “grand bargain” to overhaul Medicare and Medicaid during the post-election lame duck session, according to two congressional budget leaders.

    In successive appearances Tuesday at a deficit-reduction summit sponsored by the Peter G. Peterson Foundation, Reps. Paul Ryan (R-WI), chairman of the Budget Committee, and Chris Van Hollen (D-MD), the panel’s ranking member, agreed that any deal to enact long-term changes to the federal healthcare programs is more likely in 2013.

    “In the lame duck, you’ll see something to make sure we don’t have a train wreck,” Ryan said when asked about entitlement overhaul in the post-election legislative session. “Does that mean we’ll have permanent entitlement reform, a grand bargain that will fix every fiscal problem once and for all? I don’t see that happening.”

    Source: Rich Daly, Modern Healthcare [5/15/12]


  56. Former Medicare Chiefs Say SGR Must Be Eliminated

    Four former Medicare administrators told a panel of senators that the sustainable growth rate budget mechanism and fee-for-service payment system must be replaced.

    Unfortunately, however, there is no replacement plan for the current system, which is scheduled to cut Medicare rates by more than 30% in 2013 if Congress doesn’t prevent it. “There is no alternative ready for prime time right now,” said Gail Wilensky PhD, who led the Medicare agency during the George H.W. Bush administration.

    The Senate Finance Committee heard testimony from past leaders of the Centers for Medicare & Medicaid Services and its predecessor agency, the Health Care Financing Administration, on May 10. Senators questioned the witnesses on how the SGR and fee-for-service came about and how Congress should act to move past a broken system.

    Source: Charles Fiegl, AMNews [5/21/12]


  57. Ryan: SGR Formula is ‘Ridiculous’, What’s Ahead Could be Worse

    Wisconsin Rep. Paul Ryan’s selection as the Republican vice presidential nominee has again put Medicare reform in the national spotlight. Ryan has predicted that Congress would approve another temporary postponement of a physician Medicare payment cut in January of around 30% under the sustainable growth-rate formula used to calculate reimbursement.

    “I think the SGR is ridiculous and should have been replaced long ago,” Ryan said, adding that he hopes to replace the SGR next year with a formula that furnishes doctors with something predictable and accountable so that “we don’t have this can-kicking exercise every six months.” While the SGR has not worked, Ryan said something worse lurks ahead. “I always say to the doctors, ‘If you don’t like the SGR, just wait until you see what the IPAB has in store,’” Ryan said.

    Source: Andis Robeznieks, Modern Healthcare [8/14/12]


  58. Baucus Working to Stall Doc Pay Cut

    The Senate Democratic health policy leader is writing legislation to delay an impending Medicare physician pay cut, according to health policy sources. Sen. Max Baucus (D-MT), chairman of the powerful Finance Committee, is writing the bill that would delay a 26.5% Medicare physician fee cut scheduled to take effect Jan. 1, according to Sens. Charles Schumer (D-NY) and Chuck Grassley (R-IA).

    The senators referenced Baucus’ doc patch legislation in a letter they wrote on behalf of 29 of their colleagues this week urging him to include extensions of a range of smaller Medicare payments for hospitals, including the low-volume and the Medicare-dependent hospital programs.

    Source: Rich Daly, Modernhealthcare.com [12/7/12]


  59. Bipartisan Bill Would End SGR and Provide 0.5% Annual Increases

    House lawmakers late Thursday released the final draft of a bill that repeals Medicare’s sustainable growth rate (SGR) payment formula and replaces it with a system that incentivizes quality and efficiency starting in 2019. The bipartisan measure provides 5 years of stable Medicare payments starting next year, with reimbursements growing 0.5% for each year between then and 2018, according to the 70-page, yet-to-be-named bill.

    The 5-year period allows physicians to transition to new models of care after which doctors would be subject to having reimbursements based on performance on quality measures, or may opt out of that requirement if they practice in certain alternative payment models.

    David Pittman
    Medpage [7/18/13]


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