Failed Senate vote clouds future of SGR reform

Doctors hope the House will have more success with a Medicare pay bill and put pressure on the Senate to revisit the issue.

By Chris Silva — Posted Nov. 2, 2009

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Advocates of Medicare physician payment reform turned their attention to the House after the late October procedural defeat of a Senate bill that would have repealed the current system and effectively frozen pay rates for the next 10 years.

House Democratic leaders restated a commitment to permanent pay reform soon after Senate Democrats failed on Oct. 21 to secure 60 votes to force floor consideration of the Medicare Physician Fairness Act. The bill, by Sen. Debbie Stabenow (D, Mich.), would have abandoned the current sustainable growth rate formula and set future annual payment updates at zero, a revision that would cost roughly $245 billion over 10 years.

But Republicans and a handful of Democrats opposed to increasing the federal deficit by passing the legislation with no offsets defeated the motion. The final tally was 47-53.

Despite the setback, House Democratic leaders say they are strongly committed to passing a payment solution in conjunction with statutory "pay-as-you-go" legislation, which would require most new federal spending to be offset going forward. "We are confident that we will enact the payment reform this year," they said in an Oct. 21 statement.

The separate track

Three House panels approved separate 10-year plans to overhaul Medicare physician pay by scrapping the SGR formula and replacing it with one that more closely aligns rates with physician costs.

But at this article's deadline, the chamber was taking steps to strip that language from national health system reform bills and introduce it in November as a stand-alone bill. That would have the effect of lowering the cost of the larger reform bill.

The separate pathway to passage for a pay overhaul bill could become very difficult if the health system reform bill ends up being one of the few measures Congress passes this year. Senate leaders plan to include a one-year patch as part of their bill, but that would do nothing to eliminate planned pay cuts in 2011 and beyond.

"The most likely we are going to get is a two- or three-year patch. However, if we get some momentum in the House, perhaps there will be additional support for the Senate to look at this again," said Lori Heim, MD, president of the American Academy of Family Physicians.

But the House is stuck, because leaders promised conservative Democrats they wouldn't consider the doctor pay bill unless they find offsets or the Senate passes statutory pay-as-you-go, said Erin Kanoy, director of House relations for the Heritage Foundation, a Washington, D.C., conservative think tank. "I'm not sure anyone knows how to move forward at this point."

The developments in the Senate and House also imperil physician endorsement of broader health system reform efforts. Without a Medicare pay solution, the AMA would need to consider closely whether it could continue backing reform legislation, said AMA President J. James Rohack, MD.

"If the final bill harms physicians and their relationships with patients, then it will be difficult for us to support that," he said. "There is an urgency in dealing with this. Doctors will have to start making decisions in November and December about whether or not they will keep participating in the Medicare program."

Senate Majority Leader Harry Reid (D, Nev.) on Oct. 26 said the Senate's reform version would include a public health insurance option that allows states to opt out of participation. The public option poses a new payment issue for physicians, because Democratic leaders hope to base the plan's rates on what Medicare pays.

"The AMA firmly believes that physicians should be able to negotiate payment rates if a new public option is created," Dr. Rohack said. "Medicare's physician payment system is far too unstable to serve as the foundation for a new health insurance program."

Pushing a multiyear solution

The Senate vote demonstrated the challenge that a stand-alone Medicare physician pay bill with no offsets faces from fiscal conservatives as a planned 21.5% doctor cut nears on Jan. 1. Every Republican voted against proceeding to the Stabenow measure, and 12 Democrats and one independent joined them.

On the Senate floor, Reid said that "we were told by the American Medical Association and others that we would get help from the Republicans" to push the motion over the 60-vote margin. At a later news conference, Reid quantified that promised help as 27 Republican votes. But the AMA disputed Reid's statement, saying the projected Republican support did not refer to a stand-alone SGR overhaul.

"The reference to 27 votes was made well before [the Stabenow bill] was introduced and in the context of bipartisan health reform legislation," Dr. Rohack said.

Reid said the Senate might revisit the doctor pay issue if leaders prevail on the broader reform bill. Until then, however, physicians likely would receive only a one-year patch, he said.

But such short-term fixes have increased the size of the problem, as well as the cost of funding health reform, Dr. Rohack said. "It's leaving the impression that this is a strategy that Congress wants to limit patients' access to physicians so that they can decrease utilization of services."

AAFP's Dr. Heim said Congress must at least extend the patch beyond 2010. "They've got to stop doing this year to year."

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Access hot spots

Access to care for Medicare patients is already at risk in 21 states and the District of Columbia, an AMA analysis found. "Hot spots" are: Alabama, Arkansas, Florida, Georgia, Idaho, Indiana, Kentucky, Louisiana, Massachusetts, Mississippi, Montana, New Mexico, North Carolina, North Dakota, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, West Virginia and Wyoming. The AMA looks at five measures of access problems.

The AMA deemed states hot spots if they had a poor enough showing, based on:

  • Practicing physicians per 1,000 Medicare beneficiaries.
  • Medicare seniors with incomes less than 150% of the federal poverty level.
  • Seniors living in places deemed primary care health professional shortage areas.
  • Hospital emergency department visits per 1,000 residents.
  • Seniors not seeing a doctor during past year because of cost.

Source: American Medical Association

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