Congress Might Actually Fix a Billion-Dollar Problem

Every year since 1997, as part of the Congressional budget debate, the subject of what to do with the cumulative decrease in Medicare and TriCare reimbursement rates to doctors is usually kicked down the road. I wrote about this problem, lovingly called DocFix, in February, 2012. Recent statements and actions by key members of the House and Senate are prompting thoughts that Congress will end this folly and pass a permanent fix this year.

The first indication was in May when the Senate Finance Committee sent a letter to healthcare providers seeking input on new payment options to replace Sustainable Growth Rate (SGR) formula. This was followed by a committee hearing on the issue. Both the chair, Max Baucus (D-Mont.), and ranking member Orrin Hatch (R-Utah) stressed the need to replace the failed SGR. They were joined in this call by the witnesses who testified: Mark Miller, PhD., Executive Director, Medicare Payment Advisory Commission; Bruce Steinwald, President, Bruce Steinwalt Consulting; and Dr. Kavita Patel, Fellow and Managing Director, the Engelberg Center for Health Care Reform, The Brookings Institution.

Both the House Energy and Commerce Committee and Ways and Means Committee followed in June with a similar request. Committee Chairs Fred Upton (R-Mich.) and Dave Camp (R-Mich.) asked for input no later than July 9. The Ways and Means Subcommittee on Health held a hearing on May 7.  The five witnesses who testified, like their counterparts who testified before the Senate committee, support this effort. A hearing before both full committees is expected when the House returns from their summer recess. In addition to the request for input, Upton has prepared a discussion draft of a proposed bill.

Driving this discussion is a recent update from the Office of Management and Budget showing an increase in the cost of not replacing SGR to $139.1 billion over 10 years. This is up from the previous estimate of $138.3 billion.

Both the Senate and House approach will be to replace the fee for service reimbursement model with a quality incentive and / or outcome-based model. Both these approaches are included in the ACA as an incentive to doctors to reduce costs.

The details need to be worked out in committee. However it appears the time for a permanent DocFix is here. A solid proposal is on the table. There is bipartisan, bicameral support. The health care profession is behind it. Indications are the 113th Congress may actually resolve a major issue.