Congress Currently Working to Avert 21% Cut: Next Steps Forward in SGR Debate Remain Unclear

With the most recent SGR “patch” set to expire May 31, Congressional Democrats have begun to craft legislation to avert the again pending 21% cut in Medicare physician payments.

A number of proposals have been considered as part of closed door negotiations on Capitol Hill. The most recent proposal to come forth has been publicly released in a House amendment to H.R. 4213, the Tax Extenders Act. The physician payment provisions of the amendment include the following timeline for payment changes:

• Effective June 1 - December 31, 2010: +1.3% update
• Effective January 1 - December 31, 2011: + 1% update
• Effective January 1, 2012 - December 31, 2013: Implementation of a new temporary alternative to the SGR formula. The formula bifurcates physician services into two “buckets” or service categories – primary care services and all other services. The amendment provides for a floor of 0% to prevent any specialty from experiencing a payment reduction. Physicians in Accountable Care Organizations (ACO) would have the option of establishing ACO-specific payment update mechanisms.
• Effective January 1, 2014: The alternative formula is halted and payment rates return to levels determined by the SGR formula.

Additionally, because the proposal does not address the problems inherent to the current SGR formula, projections indicate all physicians would experience a payment reduction of over 30% effective January 1, 2014.

“We have serious concerns about the implications of this proposal for anesthesiology,” said Alexander Hannenberg, M.D, ASA President. “In addition to sub-inflationary updates in 2010 and 2011, followed by probable payment freezes in 2012 and 2013, a proposal with a payment reduction of over 30% in 2014 is not what we had hoped to see,” he added. “Because of the underlying inadequacy of Medicare payments for anesthesiology services, our specialty is uniquely vulnerable to the proposal. We recognize the enormously challenging financial environment but seek an immediate remedy that creates the fewest obstacles to permanent reform of the SGR formula.”

It is unclear whether there is sufficient support for the H.R. 4213 amendment to ensure both House and Senate passage and enactment.

ASA will continue to lobby for changes that protect payments for anesthesia services while also carefully monitoring SGR developments.

A copy of the amendment can be accessed below.

• House amendment to H.R. 4213, the Tax Extenders Act