Posted on Apr 30, 2014

Is Medicare Healthy?  Congress Puts a Band-Aid on Medicare. But Can't Agree on a Permanent Fix.

Earlier this month, Congress passed what has been referred to as the "doc fix."  With just hours to spare, the government temporarily delayed cuts of 24 percent for doctor reimbursements under Medicare. This action patches up the system for  a year, but does not address the long term problem of how doctors get paid. Medicare advocates are concerned that if the cuts are allowed to take effect then large numbers of doctors will refuse to treat Medicare patients. 


This broken payment formula was created by a 17 year-old law. As reported in the Washington Post, "In 1997,Congress created the Sustainable Growth Rate (SGR), a system that pegged the amount of money budgeted for Medicare payments to projected growth of the economy. However, within a few years, health-care costs far outpaced economic growth--creating a multibillion-dollar shortfall in funding for Medicare payments."  The April vote marks the 17th time since 2003 Congress has passed a stopgap measure to avoid drastic cuts in Medicare reimbursements to doctors. 


This latest band aid was slapped on Medicare even though there was an effort by Sen. Ron Wyden (D-Ore) to hammer out a bipartisan agreement to get rid of the SGR system entirely and put a better system in its place. "We'll punt, patch it up and let that SGR limp along just as it has year after year," Wyden conceded during a floor speech prior to the vote: "Every senator that I talked to says that that just defies common sense." 


While there seems to bipartisan agreement that the doctors' payment formula needs to be reworked and there should be incentives for doctors to provide less costly care options, there's no agreement on how to pay the approximately $140 billion cost of replacing the old system. So, in a rerun of almost every important issue in Washington these days, our elected political leaders just "kicked the can down the road."


"We just don't have the votes right now to fix this problem for good," Majority Leader Harry Reid (D-Nev.), told Fox News. Reid, who negotiated the measure with House Speaker John Boehner, R-Ohio put a rosy spin on the vote, saying, "For the millions of elderly Americans and their doctors this fix is good news. It means the promise of accessible, quality health care to our nation's seniors is being honored for another year."  However, conservative Senator Tom Coburn (R-Okla.) blasted what he called  legislative gimmicks in passing the "doc fix." Fox News said Colburn believes the just passed measure delays a long-sought overhaul of Medicare's fee-for-service system, which pays doctors according to the number of tests and treatments they perform. "We are going to put off until tomorrow what we should be doing today," Coburn said. "It's a sham. ... It's nothing but gimmicks."  All of which is to say, look for  the "doc fix" problem to pop up again a year from now and once again put Medicare in jeopardy.


Sean D. Cuddigan
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SSA and VA Disability Attorney in Omaha, Nebraska