Thursday, January 21, 2010

Doc Fix Update

As a follow up to the e-mail of last week regarding the status of the Medicare “doc fix,” you may have seen a letter the AMA and AARP sent to Leader Reid and Speaker Pelosi today calling for permanent repeal of the Sustainable Growth Rate (SGR) formula.  To that end, Sen. Reid has placed the House-passed SGR bill (H.R. 3961) on the Senate calendar.  These efforts come in advance of the expiration of the two-month SGR “patch” included in last year’s Defense appropriations bill (P.L. 111-118); the patch expires February 28, triggering cuts of over 21 percent in Medicare physician payment levels absent further action.

As background, the House-passed bill would eliminate any potential future “cuts” by permanently replacing the SGR formula with two separate formulae for physician spending – primary care and preventive services would grow at a rate totaling GDP growth plus 2 percent, and all other services would grow at a rate totaling GDP growth plus 1 percent. (By comparison, the Stabenow bill (S. 1776) the Senate considered in October would freeze the SGR for ten years, at which point the SGR’s payment cuts would return.)  This new spending would NOT be offset; CBO has estimated the cost of H.R. 3961 at nearly $210 billion, and further estimates the bill would raise seniors’ Medicare Part B premiums by nearly $50 billion over ten years.  H.R. 3961 also includes House-passed PAYGO language (H.R. 2920), that was added during the engrossment process on the House floor.

The Legislative Bulletin from the House Republican Conference summarizing the legislation, and offering potential concerns with this new deficit spending, can be found here.  We will have more information as it becomes available.