Monday, June 28, 2010


As expected, the House fell into line last week with the Senate’s six-month extension of the delay in imposing SGR-based Medicare physician payment cuts, just in time to prevent docs from getting checks 21 percent smaller than a month earlier.

Congress has been ducking the payment cuts almost since the SGR mechanism was put in place in 1997, fearful of offending physicians and fearful of reducing access as docs quit Medicare in disgust. Time may be running out, however, with the passage of health care reform with its own increases in coverage and potential Medicare payment restrictions. It’s no coincidence that Congress is getting closer and closer to the brink of letting the cuts take place, and imposing shorter and shorter delays in their imposition.

So, having bought themselves another six months, what should our elected representatives do?

Simply leaving the SGR process in place is less and less an option. After thirteen years, and with a potential thirty percent payment cut in 2011, SGR is an increasingly hot political potato. On the other hand, proposing any change is politically risky, and no change is likely before the November 2010 election. After that, Congress may get serious.

One politically courageous approach then would be to tie physician payment updates to hospital region cost increases, reflecting the Dartmouth Atlas findings of wide variations in Medicare costs and cost growth. (Take that, New York Times reporters!) Regions with highest physician costs per beneficiary and highest cost growth would be granted smallest physician payment increases. Docs in the high cost regions would undoubtedly shrilly object, with some abandoning Medicare (not necessarily bad, given that more docs leads to more utilization), while their peers in lower cost areas would look on in amusement. Worth trying? It might be a lot quicker and easier than waiting for the Independent Payment Advisory Board to make its recommendations.

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