Run For the Hills, the Doctors Are Coming, the Doctors Are Coming!!!!
What is the one thing no human being should want to be next week?
A Republican Senator at a Fourth of July Picnic.
In the most amazing turn of events I have seen in 20 years of following health care policy in Washington, DC, the Democrats have the Republicans backed into an awful corner over the issue of the July 1st automatic 10.6% Medicare physician fee cut and corresponding private Medicare cuts to pay for nixing it. Also at stake is another 5% physician fee cut set for January 1, 2009.
On Tuesday, when the House voted 355-59 in favor of the Senate Democratic bill to stop the physician fee cut, suspend the durable medical equipment competitive bidding system, and pay for the doc cut by ending the private fee-for-service version of Medicare Advantage in 2011, no one was more surprised then the Senate Democrats themselves.
On seeing that vote, Senate Democrats scrapped the bipartisan compromise that Baucus and Grassley worked out to avoid the cuts, freeze 2009 physician payments, and bypass the Medicare Advantage changes to pay for it. Everyone was ready to be happy with that--Democrats and Republicans--and go home for the week-long holiday recess.
But then Senate Democrats saw a huge election-year opportunity--stick the Republicans out on a limb and start sawing it off.
Senate Majority Leader Reid and the Senate Democrats decided to shelve the Baucus/Grassley compromise and bring the just passed House bill back for another Senate vote (the first attempt to get the 60 votes necessary for cloture failed garnering only 54 Senators).
Late Thursday night they did just that and missed getting the necessary 60 votes by just one Senator. It is notable that Senator Kennedy was not present and could have been the 60th vote. It was a very undignified scene on the Senate floor as Republicans felt betrayed thinking they had an amicable deal to get past the cuts and go home.
It is also important to remember that Senate Democratic Leader Reid came in for lots of criticism by House Democrats late last year when he chose not to take on the Republicans and a threatened Bush veto and settled on a modest SCHIP compromise. Many in the House thought Senate Democrats should have been tougher. This may be Reid's chance to show the House how tough he can be--especially since the House handed him such a lopsided veto-proof margin on this vote.
So, the Senate recessed on Friday with the docs facing a 10.6% fee cut in just four days.
The Democratic plan is, with the docs looking down the barrel of a 10.6% fee cut on Tuesday, to let the Senate Republicans stew in a provider lobbying onslaught of unprecedented proportions during the week-long recess.
How effective is the doctor lobby? 355-59, that's how effective. About every other health care provider is onside with the docs as well--durable medical equipment because of their bailout in the House bill, and every other provider because they'd like to see the precedent established that it is the HMO industry that has the money to give back to Medicare--not them. AARP is also backing the docs giving members political cover with seniors to vote against the private Medicare plans.
I am continually asked, Would Congress really cut private Medicare with almost 10 million seniors in it? 355-59--any other questions?
Bush also reaffirmed his veto threat for any bill that cuts private Medicare. HHS, trying to get some heat off Republicans and save CMS from a real payment mess, deferred the physician cuts for ten days.
What's going to happen when the Congress returns on July 7th?
There will quickly be another Senate vote on the House bill.
If it passes it goes to Bush who, as long as the vote isn't enormously lopsided, will veto it. In that case the docs will need to have scared enough Republicans to get a veto-proof 67 votes or the docs are out 10.6%.
For two years I have been telling you that the Dems were going to get private Medicare. In November 2006, I thought the big showdown would come during the 2007 budget deliberations. More recently, I figured the Democrats would just bide their time until they had a stronger hand--after the coming elections.
Turns out I was six months off the first time.
Will the doctors suffer the 10.6% cut if the next Senate vote fails to move the bill? Could well be. Sure, the Baucus/Grassley compromise is laying there but I can't see the Democrats backing down now. The train has left the station on the Democratic argument that it is the Republicans who are blocking a physician fee fix and I think they will continue down that track.
If you are a doctor, I would go find your Republican Senator at the nearest Fourth of July picnic and get at it.
If 7 or 8 Republican Senators don't come back to Washington on July 7th with a changed mind, you are out 10.6% on July 1st and another 5% on January 1, 2009.
We will have extraordinary political theater the week of July 7.
14 comments:
I fail to completely understand why Medicare HMO plans existed quite well on 95% of Medicare funding in the 1990s. I can understand why PFFS plans need more money, but 117%?
There must be a better way.
Rick
It just makes no sense that Medicare can find money for hospitals, DME makers, part D, and even MA plans, but that docs get a 10.6% cut with another 5% cut in 6 months.
This reminds me of the old saw:
What if they had a war and nobody came?
Well, what if they had a Medicare program but no docs came?
If the docs didn't keep driving healthcare utilization higher and higher each year, there wouldn't need to be a 10.6% fee cut because the SGR formula wouldn't call for it. Maybe it's time for EBM, P4P, and comparative effectiveness reseach.
Barry makes a point we should not miss.
It is so easy to get caught in the politics of this and the Medicare Advantage payment issue and miss the fact that the "sustainable growth rate formula" is telling us something:
Physician costs are not sustainable.
Thanks for the post, I for one am tone deaf on the whys of these things, so the story behind it all is useful.
I hate the way they bundle these things up to pass them because I for one think that thinks like oxygen, wheel chairs and hospital beds should be bid out competitively. Hopefully that will be revisited at a later time.
Since the Medicare HMO plans made about 3 times more profit than was projected, should they return the money? On the other hand, that;s only $1.4 billion, so it may not count for much in the overall picture. I guess they really do need to be protected by Congress so they don't have to cut their CEO's compensation or their shareholder's dividends.
Harry L Gewanter
>miss the fact that the "sustainable growth rate formula" is telling us something:
>Physician costs are not sustainable.
Or...
That the SGR is flawed.
Why is it the SGR isn't applied to hospitals, DME, or MA plans?
Additionally, $4/gallon gas is not "sustainable", yet congress cannot repeal supply and demand.
And if the costs of practicing medicine continue to increase, and Medicare payments decrease, how long before docs bail out? And all the hospitals and MA plans in the world don't do much good without docs.
So if congress can't find the money, they should lift the ban on balance billing and let the market do its work.
Ultimately, with a $44 Trillion projected shortfall in Medicare between now and 2040, Medicare may not be sustainable...not just docs, but the whole schmeer.
The Sustainable Growth Rate Formula needs to be abolished - It is a major factor in killing primary care medicine.
Good primary care leads to lower costs for Medicare patients and the system as a whole. Without improving the primary care infrastructure, Medicare coverage will soon be about worthless.
The Senate voted in favor of insurance companies at the expense of the primary care doctors who haven't had a decent cost of living adjustment from Medicare in over a decade.
Ben Brewer M.D.
It's worth remembering that (with only a few exceptions), physicians were mostly happy with the SGR... until there were cuts. Then it was suddenly 'flawed.'
It's also worth remembering that the SGR was created by Republicans in 1997, who wanted Medicare FFS to be 'sustainable' in line with economic growth.
Before the SGR there used to be three target expenditure growth rates, including a special rate for primary care. Some people suggest we should have a different primary care SGR. The advantage of such a reform would be that utilization of imaging services beyond the target would not penalize primary care or physicians in other areas.
The reality is that doctors are already bailing out of the system. "Concierge medicine," as it is called, is becoming more and more attractive to primary care physicians because current reimbursement for seeing and examining patients is insufficient. Concierge medicine allows primary care physicians to practice the way they feel it should be practiced; it allows for more time with--and attention to--their more limited number of patients. SGR is a failure, and it's time for Congress to admit it.
There are lots of reactions from docs saying that the Sustainable Growth Rate Formula is a failure. Clearly, since the Congress keeps overriding it it is.
But I think that misses the point. Doc costs, like the rest of Medicare is escalating at an unsustainable rate. Even with a deal here, the docs face a 21% cut on 1/1/10 because costs are way out ahead of what we can afford.
This is an issue we can't avoid much longer.
Rather than docs saying they can't take anymore hits (which often especially primary docs cannot) what do we need to do?
One suggestion I saw recently was a new SGR that splits primary from specialty so primary doesn't have to suffer with specialty utilization rates.
Joe Paduda has a great companion piece to this post today: http://www.joepaduda.com/archives/001246.html
>This is an issue we can't avoid much longer.
>Rather than docs saying they can't take anymore hits (which often especially primary docs cannot) what do we need to do?
Simple. Restore balance billing. Medicare could pay less, thereby rescuing the treasury. But docs could get market rates for their services by billing the remainder to patients.
Note, that this would finally restore some incentive in the system for something other than volume.
Failure to act will drive docs out of practice and will make other careers relatively more attractive to students in the competition for talent...thus at best decreasing quality and at worst decreasing quality and causing a massive shortage.
But why should this be a surprise to anyone.
If prices are fixed below market prices for a substantial amount of time, shortages ALWAYS result.
For example, if we just fixed the gas price at $3/gallon now, who would sell gas at a loss? Can anyone say 1973?
And if the SGR is so great, why doesn't it apply to hosptials or DME or Part D or anything else?
And why on Earth is it linked to GDP instead of the costs of practicing medicine? Seems like a massive disconnect to me.
The biggest crisis in healthcare was triggered last week by the Senate's failure to eliminate a 10.6% Medicare fee cut to physicians. WhatDoctorsThink.com performed an online physician survey in early June 2008 – see question #6 at http://whatdoctorsthink.com/cgi-bin/comments.cgi?healthcarepolitics-results -- and found that if the fee cut goes through then 19.2% of physicians will increase their fees to non-Medicare patients to compensate for their Medicare cutbacks. Since most physicians are tied into fee schedules from HMOs and health plans, they will naturally increase fees to uninsured patients and patients with health insurance that has poor coverage. Additionally, our poll of 167 doctors indicates that 19% will stop seeing Medicare patients completely if the fee cut occurs. Those doctors will have to make up for all those lost Medicare revenues and will naturally charge more to the uninsured and to people who have poor insurance coverage. Additionally, 32% of doctors polled by WhatDoctorsThink.com indicated that they would reduce the number of Medicare patients they see – usually that means not accepting new Medicare patients. Finally, our survey indicates that 4.8% of doctors will shut their practices completely as a result of the Medicare fee cut. That means that a significant number of patients will have to find new doctors who accept Medicare. That will cause delays in prompt health care as the patients search out new doctors, and delays always result in increased tests, more severe health problems and increased expenses. Additionally it will burden the already overwhelmed emergency rooms. One can clearly see from our surveys, which have a history of accuracy, that the Medicare fee cuts to physicians will have a huge domino and ripple effect that will not only reduce quality and access to healthcare for senior citizens, but also increase healthcare costs dramatically for everyone else.
Robert Cykiert, M.D.
President,
WhatDoctorsThink.com
For five years now, Medicare has been paying private Medicare Advantage plans much more per enrollee compared with what the same enrollees would have cost in the traditional Medicare fee-for-service program. The money used to pay Advantage insurers is coming out of traditional Medicare.
It's time for the Congress to examine whether the extra payments to Medicare Advantage plans are the best use of tax-payers dollars for the beneficiaries the program is designed to serve.
These payments could be used to provide better benefits, like filling in the doughnut hole and reduce out-of-pocket costs for seniors and the disabled, as well as to create a viable alternative to the ineffective sustainable growth rate mechanism currently used to determine the physician payment update.
Traditional Medicare needs to be able to compete on a level playing field with private plans, which requires the elimination of these extra payments.
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