House votes to halt Medicare SGR cuts for two years
Final outcome hinges on Senate, possible presidential veto
ASA is pleased that the U.S. House of Representatives has voted to provide a positive update to Medicare payments for physicians and create a pathway to reform the SGR annual update mechanism. The changes were included as part of H.R. 3162, the Children’s Health and Medicare Protection Act (CHAMP) which passed the U.S. House on August 1, 2007. The principal purpose of the legislation was to renew funding for the 10-year-old State Children’s Health Insurance Program (CHIP).
While this is a positive move in the right direction toward providing fair Medicare payment to physicians, many steps must occur before the bill becomes law and all provisions are implemented.
What happens next?
1. Since the Senate considered a different version of the bill that only addressed CHIP reauthorization and did not include provisions related to Medicare physician payments, the differences between the House and Senate bills must be negotiated at a later date through a “Conference” process. This could be a particularly challenging Conference because of the vast differences in size and price between the House and Senate versions of the legislation.
2. The president has said he will veto the bill. The administration has publicly stated that the legislation is too expensive, and that it is a dangerous step toward the notion of government-funded healthcare.
3. Outlook is unclear. The process could begin again with the same legislation, different legislation, or a new approach altogether.
Unless the legislation is enacted, anesthesiologists and all of medicine face a 10 percent cut in Medicare payments beginning in January 2008, and a 15 percent cut beginning in January 2009, due to the Sustainable Growth Rate formula (SGR). The Medicare provisions of H.R. 3162 would provide a two-year positive Medicare physician payment update, and would set the stage for a repeal of the SGR.
While the legislation is not perfect, ASA supports these steps toward providing fair Medicare payment to physicians. Without these positive updates, our nation’s most vulnerable populations—children and seniors—could face difficulty accessing medical care. CHAMP has also received broad support from groups such as the American Medical Association (AMA), AARP, and the March of Dimes.
Key CHAMP provisions:
- Averts the 10% Medicare physician payment cut scheduled to begin Jan. 1, 2008
- Averts the 15% Medicare physician payment cut scheduled to begin Jan. 1, 2009
- Provides a 0.5% positive payment update for two years
- Reforms the existing single physician SGR expenditure target and replaces it with separate targets for 6 categories of physician services including anesthesia services. Allows for reasonable growth and potential positive updates.
- Allows an additional two-year reprieve on the geographic adjustment for rural areas to maintain GPCI’s at or above 1.0 for work
- Commits funds to reauthorize and improve the Children’s Health Insurance Program (CHIP), which provides six million children with quality, affordable health insurance
- Funded primarily through higher tobacco taxes and cuts to private Medicare managed care plans.
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The CHAMP bill does not include language to restore full Medicare payment to anesthesiology teaching programs—which currently face a 50% payment penalty for overlapping cases. However, as Congressional support for reform of the anesthesiology teaching rule continues to grow, ASA will continue efforts to tap into that support to secure enactment of a teaching rule fix.
As it becomes available, more information about CHAMP will be posted to the ASA website.
Click here for the final vote count for H.R. 3162.