Congress Stops Medicare SGR Cut But Fails to Adopt Long Term Fix

Congress Stops Medicare SGR Cut

CMA Outraged Congress Fails to Adopt Long Term Medicare Fix

Today, a Congressional Conference Committee reached an agreement to extend the Social Security payroll tax cut, unemployment insurance benefits and to stop the 27.4% Medicare fee-for-service SGR payment cut. Congress is expected to adopt HR 3630 on Friday followed by the President’s signature. While the agreement stops the 27.4% Medicare payment cut, Congress failed to adopt a permanent solution to repeal the flawed SGR payment formula that imposes annual payment cuts on physicians. Congress’ failure to adopt a long term solution will continue to drive physicians out of the Medicare program and further erode patient access to care. 

There were a number of courageous California Members of Congress who supported plans to repeal the SGR and put Medicare on stable footing, including the use of the unspent Iraq/Afghanistan military funding and other spending cuts. Yet the final negotiators rejected those proposals. The CMA is angry. Congress missed a unique opportunity to repeal the Medicare SGR. They have merely blocked the cut and kicked-the-can for 10 months. Rather than being the stewards of the Medicare program, it is distressing that some in Congress continue to triage the problems in our nation’s largest and most influential health care program on a month-to-month basis. Physicians can’t operate a medical practice on such an adhoc basis. 

The SGR Agreement 

The 10-month Medicare SGR patch costs nearly $20 billion and is paid for by

• Reducing the public health fund in the Affordable Care Act by $5 billion (with the President’s approval)
• Reducing payments to disproportionate share hospitals
• Lowering compensation for hospital bad debts 
• Cutting Medicaid funds targeted to help the victims of Hurricane Katrina in Louisiana. 
• It does not include the House-passed Medicare beneficiary premium increases which originally helped to pay for the SGR block.

California Geographic Payment Locality Update (GPCI Fix)

The CMA also attempted to include a Medicare geographic payment locality update (otherwise known as the “CA GPCI Fix”) in the conference agreement which would have also held California’s rural physicians harmless from cuts. The proposal would have been paid for with savings from adopting a County Organized Health System in Alameda County as approved by the ACCMA. While CMA was finally able to remove most of the opposition on this proposal, it was difficult to move a new issue into a conference agreement and it literally failed in the final hours of the negotiations. CMA thanks members of the California Congressional delegation, particularly Representatives Farr, Bilbray and Senator Feinstein for their leadership and commitment to resolving this issue. CMA will continue to look for other legislative vehicles to accomplish our locality update during 2012.    

Lame Duck Session of Congress

With this Conference Committee action, Congress will be forced into a Lame Duck session after the 2012 elections to protect seniors and military families from an even larger 35% Medicare SGR payment cut in 2013. By punting the Medicare SGR issue, Congress has dug itself a $400 billion SGR hole – up from $300 in 2012. A Lame Duck session of Congress will also be faced with the expiration of the Bush tax cuts, the upcoming sequestration that forces across-the-board government cuts - including a 2% cut in Medicare, as well as half a billion in military cuts. And the government may hit the federal debt ceiling sometime late next fall. 

As usual, physicians will be competing with many interests (the military, the budget deficit, hospitals, health plans, beneficiaries and even the oil companies) for Congress’ attention and resources. It is one of the most difficult political and financial environments ever witnessed in Congress. 

CMA Advocacy

To that end, CMA will remain involved at the highest levels of Congress to continue to protect the profession and speak out for our patients. CMA will never stop fighting. CMA thanks all county medical societies and physicians who got involved, held meetings with their Members of Congress, made phone calls and wrote letters. We particularly thank those of you who involved your patients in this important campaign. Your CMA physician leaders were in Washington, D.C. all week working to get a better deal for CMA physicians and your patients. Their incredible dedication and commitment should be recognized and appreciated by all. 

Attached are the CMA federal Congressional priorities, as well as the issues we presented to CMS during our meeting with Marilyn Tavenner - the acting director of CMS and the CMS Innovation Center.