Congress Must Retool Reimbursement Formula in 2009

Last July, Congress replaced Medicare’s 10.6 percent physician payment cut for 2008 with a slight reimbursement uptick for 18 months. However, the flawed physician reimbursement (SGR) formula at the root of Medicare’s payment crisis remains in effect.

ISMS and the American Medical Association (AMA) continue to support efforts to stabilize Medicare for the long term. However, it will be a significant challenge to keep Congress from sweeping the politically unpalatable SGR issue under the rug in 2009. Here are a few reasons why:

Alternatives are expensive – Replacing the SGR formula with a more equitable reimbursement methodology will require a massive increase in federal spending. Indeed, most federal lawmakers support stabilizing Medicare, but finding support for a proposal costing hundreds of billions of dollars is a tricky proposition.

Since Congress theoretically operates on a system requiring offsets for “new” spending, lawmakers can transfer funds from other programs (or against future projected Medicare payments). However, borrowing from Peter to pay Paul just exacerbates the problem.

Quid pro quos are a fact of life – Congressional votes to enact short-term Medicare payment fixes often carry extra political baggage in the form of pet initiatives, such as quality measurement and improvement (pay for performance).

One example of a program that emerged out of a short-term payment fix is Medicare’s Physicians Quality Reporting Initiative (PQRI). Watch for continued efforts to tie Medicare reimbursements to medical outcomes and other policy changes in 2009.

Just part of the “big picture” – Many observers expect the next Congress and President tomake an earnest attempt to deal with covering the uninsured. While that’s a laudable goal, competing needs will make it difficult to persuade lawmakers to fund an expensive Medicare payment fix.

In 2009, physicians must join ISMS and the AMA to help lawmakers see the “big picture” when it comes to preserving access to health care. This picture must include a long-term solution to Medicare’s physician payment crisis.

Contact: John Maszinski, 800-782-4767 ext. 6440 or johnmaszinski@isms.org