Posts Tagged ‘Sustainable Growth Rate’
In the News
June 21, 2010Congressional Gimmicks leave Doctors and Taxpayers in a Lurch
The Senate voted 45-52 yesterday to oppose the $140 billion so-called “extenders bill” (HR 4213). The Hill is reporting that Sen. Max Baucus (D-MT) is going to offer a slimmed down version for consideration as early as today. Two key health provisions of the bill are expected to be a continued bailout of state Medicaid programs and a temporary Medicare ‘Doc Fix’.
The Sustainable Growth Rate (SGR), initiated in 1997, links the increase in Medicare reimbursement rates to growth in GDP. Since medical costs historically increase at a rate more than twice GDP, the SGR reduces the real payments physicians receive. A temporary “fix” has happened nine times in nine years to increase Medicare rates above SGR levels. Temporary fixes are the easy way out for politicians because they appear less costly to budget.
The Hill reports that Senator Baucus is going to use a budgetary trick by paring down the “doc fix” from 19 months to 6 months. Of course, this means that the budgetary cost of the bill will appear smaller, but in reality the only difference is that Congress will have to revisit this issue in 6 months instead of 19 months – kicking the can down the road once again. (more…)
Tags: doc fix, federal spending, Medicare, Patient Protection and Affordable Care Act, Sustainable Growth Rate, tax extenders bill
In the News
November 12, 2009Promised Health Care Savings: Don’t Bet On Medicare Cuts
Forget the President’s rhetoric about bending the health care cost curve.
The House of Representatives will soon vote on legislation (H.R. 3961) that effectively repeals the cost control mechanism included in the Medicare physician payment update formula back in 1997.
Passage of H.R. 3961 would add another $210 billion to the Federal government’s ballooning deficit — and even more importantly — it would demonstrate that Congress is not serious about actually enforcing any new Medicare spending cuts included in its pending health care bills.
The result could be another half-a-trillion dollars — or more — added to the federal deficit over the next ten years if Congress passes new health care legislation. The experience with Medicare physician payment “reform” perfectly illustrates why the spending cuts that finance much of the new health legislation are likely to never happen. (more…)
Tags: doc fix, Medicare, Obama Health Care Plan, Sustainable Growth Rate, trillion dollar deficits
Latest Research
October 19, 2009Exposing the Obamacare Shell Game
In his primetime health care address before a Joint Session of Congress, President Barack Obama promised the American people: “I will not sign a plan that adds one dime to our deficits – either now or in the future. Period.” But it is hard work adding $1 trillion in government spending while claiming with a straight face that you are not adding to the deficit. Enter White House Chief of Staff Rahm Emanuel who has just the solution: just strip out $247 billion of the spending in the bill, pass it separately, and voila … your job just got one-fourth easier.
The specific issue at hand is the centrally planned price control regime the federal government uses to reimburse doctor’s who participate in Medicare. Medicare reimburses doctors and other medical professionals for their services according to a congressionally created fee schedule that is annually adjusted by the Sustainable Growth Rate (SGR) formula. The idea is relatively simple: If Medicare spending grows faster than our overall economy (which is almost always the case), then payments to Medicare providers are supposed to be reduced proportionately to keep expenditures in line over a period of time.
Problem is every year Congress–under both Democratic and Republican leadership–routinely blocks the cuts from going into effect. Subsequently, the necessary cumulative cut in Medicare payments grows bigger. Without a change to current law, payments to physicians would be reduced by 21.5% as of January 1, 2010. The Senate Finance Committee bill addresses this problem by raising the reimbursement rate for one year and then pretending that Congress will allow massive cuts for the next 9 years. House Majority Leader Steny Hoyer (D-MD) rightfully called the Senate Finance Committee proposal a façade. (more…)
Tags: Harry Reid, Medicare, Obama Health Care Plan, Rahm Emanuel, Sustainable Growth Rate, trillion dollar deficits
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