2006 Medicare Payment
Fix by No Means a Certainty — Urgent Action
Still Needed!
Ronald Szabat, J.D., LL.M., Director
Governmental and Legal Affairs
troubling message is beginning to circulate around
Washington, D.C. It seems that Congress might lack
the will to correct the unfair impact of the Medicare
sustainable growth rate (SGR) formula and avert Medicare
physician payments cuts of 4.3 percent beginning January
1, 2006. ASA and all of organized medicine have done
an excellent job of letting Congress know that this
cannot be allowed to occur. In fact this issue was
a major focus of the hundreds of anesthesiologists
from across the country who traveled to Washington
just last month to lobby their legislators firsthand
in conjunction with our 2005 Legislative Conference.
But while there is widespread sympathy for physicians
on both sides of the aisle on Capitol Hill, sympathy
will only take us so far. Instead we need commitments
and action soon. Congress can and must act this summer.
The legislative clock is ticking, and every day there
is less time to avoid this rollback.
The path to the Medicare physician payment fix should
not be this hard. In late April, Congress did muster
the will to pass a Budget Resolution for the first
time in several years. This significant action will
take the country a long way to reducing the runaway
deficits of recent years and achieving President George
W. Bush’s goal of halving the annual federal
deficit by the time he leaves office. All this is
laudable in terms of long-term fiscal solvency and
sanity, but it seems to fly in the face of escalating
costs and demands for physician services under Medicare
Part B in the short term.
In a late March letter to the Medicare Payment Advisory
Commission (MedPAC) from the Centers for Medicare
& Medicaid Services (CMS), the driving forces
behind the escalating volume and intensity of physician-delivered
Medicare services were detailed, and the detractors
have latched onto these items even as explanations
by the affected specialties are still being formulated.
It seems that in 2004, spending for physician office
visits, minor procedures and complex imaging and laboratory
tests all increased dramatically, thereby accounting
for much of the growth that the SGR formula is designed
to recapture. Add to that the dramatically escalating
costs of physician administered prescription drugs
— which should not have been held against physicians
in the first place — and the SGR formula for
disaster is complete. In other words, under current
law, if Medicare Part B spending goes up more than
the average rate of economic growth in the United
States in any one year, then physicians have to absorb
these costs in reimbursement cuts the next year.
The troubling reality of these facts and figures is
that every year there are more and more seniors who
are living longer with enhanced opportunities for
innovative medical interventions and surgery with
buffered cost impact to them. And the simple notion
that physicians can work single-handedly to restrain
this growth is proving laughable, with the joke being
on us! As the typical anesthesiologist knows all too
well, there is little he or she can do to cut either
the volume or intensity of anesthesia care without
risk of severely adverse outcomes. This whole thing
is anti-senior and anti-physician!
So where does ASA go from here? Our message must be
simple and straightforward. MedPAC, the very entity
that Congress created to advise it on physician reimbursement
matters, has recommended a positive Medicare physician
update for 2006 and replacement of the SGR formula
with an index that reflects the actual rise in medical
costs, such as the Medicare Economic Index (MEI).
This is what Congress needs to do through the budget
reconciliation process this year. To do less will
threaten patient access and only drive physicians
away from their willingness to treat our seniors.
As passed by the House and Senate, the FY 2006 Concurrent
Budget Resolution calls for $2.6 trillion in spending
with $843 billion in discretionary spending. The total
tax reconciliation number will be $100 billion over
five years with $70 billion protected under reconciliation.
The total mandatory spending reconciliation number
will be $34.6 billion. What do all these mind-numbing
and nearly incomprehensible numbers and concepts mean?
Well, for physicians and patients, only that the Medicaid
program could be the focus of further cutbacks and
reform and that the congressional committees with
jurisdiction over Medicare, principally House Ways
and Means, Energy and Commerce and Senate Finance,
might be able to achieve their required “savings”
under the Budget Resolution without any Medicare changes
at all. This, again, is what some of these committees
are telling ASA, and we must not let this happen or
the 2006 Medicare payment cuts may be inevitable.
What can you do?
Act now! Send an e-mail
or fax today to your members of Congress and make
three simple points: 1) the Medicare SGR formula is
broken and must be replaced; 2) Medicare physician
reimbursement must be based on medical input prices,
such as MEI; and 3) that Medicare physician payment
cuts of 4.3 percent in 2006 and beyond are unacceptable
in light of already dramatically low Medicare anesthesia
conversion factors, escalating medical liability premiums
and other uncontrollable expenses. In your electronic
communications and faxes, please stress that
Congress
must act this summer to correct the Medicare SGR formula
through the budget reconciliation bills.
Some helpful links for contacting your legislators
can be found at
<www.house.gov>
and
<www.senate.gov>.
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