Bipartisan Legislation Could Finally Fix Medicare Reimbursement Formula


WASHINGTON (Feb. 1, 2014)—A 17-year-old formula meant to control the increasing costs of Medicare reimbursements threatens to restrict physician access for Medicare and Medicaid patients in Maryland.

Since 2002, Congress has avoided implementing the cuts called for by the formula, protecting Medicare patients from losing access to doctors who might otherwise refuse the health care program because of the decrease in reimbursements.

However, the accumulated cuts called for by the Sustainable Growth Rate formula now add up to 24 percent, with the most recent Congressional patch implemented in late December and expiring March 31.

Congress will have to decide whether to repeal the formula or implement another patch. And for the first time, there is bipartisan support for a permanent fix that would replace the Sustainable Growth Rate formula.

“There is no better time than the present to get rid of the unrealistic SGR formula once and for all, and to replace it with permanent reforms to encourage quality, high-value care in Medicare,” Rep. Chris Van Hollen, D-Kensington, said in a statement.

SGR directly affects Medicare, a federal government sponsored health care program for senior citizens. This program differs from Medicaid, which provides for low-income citizens and is controlled jointly by state and federal governments.

Medicaid’s reimbursements are typically lower than Medicare’s.

But several states, including Maryland, have raised Medicaid reimbursements to Medicare levels so that those patients have access to more physicians. Because of this, SGR cuts now threaten to affect Medicaid and Medicare in those states.

“So, if Medicare levels would fall 24 percent, Medicaid reimbursements would similarly fall 24 percent,” said Rep. Andy Harris, R-Cockeysville, himself a physician.

“And that particular problem in Maryland would undermine the Medicaid expansion through the Affordable Care Act because it would further limit access of those expanded beneficiaries to physician care,” said Harris, who opposes the Affordable Care Act.

Members of Congress have proposed three bills to deal with the problem. Two are from House committees – Energy and Commerce and Ways and Means – and the other comes from the Senate Finance Committee.

Dr. Ardis Dee Hoven, president of the American Medical Association, said Congress has been responsive to suggestions for the repeal, which would help increase physician access and enhance quality.

“I think this is a historic time in our country,” Hoven said. “This is bipartisan and bicameral.”

But a repeal would cost more than $120 billion without taking inflation into account, Harris said.

One proposal is to base reimbursements on the quality of a physician’s care with yearly measures set by the U.S. Secretary of Health and Human Services.

“Performance is important,” Hoven said. “Quality is important.”

Harris and Hoven agree that the benchmark should be created by professional societies that oversee specialties.

One suggestion to make up for the savings the SGR would generate includes a freeze or an increase in payments by 0.5 percent for several years until the quality-based reimbursement plan is implemented.

The action taken will affect those with Medicare and Medicaid in Maryland, where Medicare covered 306,200 people in 2012, according to the U.S. Census Bureau’s Population Estimates Program.

The Henry J. Kaiser Family Foundation found that in June 2012 Maryland’s Medicaid enrollment was 889,700.

The number of individuals with these health care programs continues to increase.

“I think we should just face reality and realize that we are never going to make these cuts in payments because if we did we would be limiting access of seniors on Medicare to their physicians, and we should just come up with a way to save that money somewhere else in the federal budget and to prioritize the health care for our seniors,” Harris said.

Featured Sponsor

Jimmy Hayden - O'Brien Realty

Reader Comments

Featured Sponsor

Tantaztic Tanning Center
FIVE levels of tanning. Located in the Wildewood Shopping Center.

Need Legal Representation?

Three So. Maryland locations to serve you. Personal Injury, Criminal Defense, DUI Defense.

Follow SoMd HL News