Tag: "doctors"

Chief Actuary Blows Away Make-Believe Medicare “Doc Fix”

A similar version of this Health Alert appeared at Forbes.

On March 25, the U.S. House of Representatives voted for a fiscally irresponsible so–called Medicare “doc fix” that will add $141 billion to the deficit over the next ten years, according to the Congressional Budget Office (CBO). The U.S. Senate will likely vote on the bill later today, and the same lobbyists who dragged Obamacare into the end zone in 2010 are hoping for another win. This one will be even better, because it will be bipartisan.

Nobody denies the way Medicare pays doctors today is flawed. Every year, Congress has to increase the scheduled amount of money because if it did not, fees would drop by about one fifth. Many doctors would stop seeing Medicare beneficiaries.

There are two major differences between this so-called “fix” and previous ones. The first one is real: Previous increases have been offset by cuts to other government spending, and this one is not. The second one is fiction: That this doc fix is a permanent solution to the fee problem.

That fiction was debunked last week in a report published by Medicare’s Chief Actuary.

Paying for the Medicare Doc Fix is Easy

A similar version of this Health Alert appeared at Forbes.

Late last month, an overwhelming bipartisan majority in the House of Representatives approved the Medicare Reauthorization and CHIP Extension Act (MACRA), a fiscally irresponsible approach to increasing the amount the federal government spends on Medicare’s physicians’ services. Medicare’s Physician Fee Schedule is tied to an inflation formula that is inadequate to pay physicians enough to keep seeing Medicare patients. While Congress has had to increase this amount every year, those increases have always been funded by offsets from other federal spending.

This is the first time politicians of both parties have ignored this rule, increasing Medicare’s physicians’ payments perpetually and not paying for it. Worse, gimmicks obscure the true cost of the bill. Further, the bill would centralize federal control of the practice of medicine along the lines of Obamacare. The bill faces a lot of pressure to pass the Senate next week, especially because Medicare will have to start paying doctors according to a significantly lower fee schedule on April 15. So, the Senate needs to fix the bill very quickly before approving it.

There are three responsible approaches: A shorter “doc fix” that increases physicians’ Medicare payments by no more than two years, which can be easily offset just like 17 previous doc fixes have been; including MACRA on the “pay as you go” (PAYGO) scorecard, making its spending subject to sequestration; or finding $141 billion of offsets required to make the entire bill budget neutral.

Fixing the Medicare Doc Fix Fiasco

On March 26, an overwhelming bipartisan House majority voted for H.R. 2, the Medicare Access and CHIP Reauthorization Act (MACRA), by 392-37. This bill is the so-called Medicare “doc fix,” a prize that has been chased for many years but never caught by politicians eager to break out of the fiscal discipline a previous Congress had imposed on them.

In 1997, similarly large bipartisan majorities passed the Balanced Budget Act, which introduced the way Medicare pays doctors today. Payments are supposed to be based on the Sustainable Growth Rate (SGR). The SGR was designed to contribute to a balanced budget by linking Medicare’s payments to physicians with a measurement of the nation’s ability to pay for the entitlement: Real Gross Domestic Product (GDP) per capita.

Unfortunately, the rate of growth indicated by the SGR was not adequate to pay physicians enough to see Medicare beneficiaries. So, within a few years, Congress had to find more money. Importantly, Congress always paid for these increased payments by cutting spending in other areas.

This has become increasingly painful for politicians, who now revile the SGR as “broken” and “unworkable.” They act as though the fiscal discipline brought about by the SGR was imposed on them by alien invaders instead of Congress itself.

So, last month, the House of Representatives decided to throw any pretense of fiscal discipline out the window, passing an unfunded “doc fix” that will add half a trillion dollars of debt to the nation’s balance sheet. Further, it increases federal control of the practice of medicine, thereby reinforcing the changes to Medicare introduced five years ago in Obamacare (which explains why President Obama has pledged to sign the bill).