The Doc Fix Is In?

I am generally skeptical about the prospects for a permanent "doc fix" — an end to the Medicare physician reimbusement formula that calls for doctor payment cuts every year, and that that Congress always overrides as a result. Members of Congress in both parties have long said that they want to ditch the formula, known as the sustainable growth rate (SGR), entirely. But the official estimated cost of doing so has always made that difficult. 

This week, however, a permanent fix got a lot easier. Because according to the Congressional Budget Office, it got a lot cheaper. Here's National Journal with the details:

In its budget outlook released on Tuesday, the CBO slashed the projected cost of a long-term “doc fix” by nearly half. That change means that if Congress wants to reverse the flawed and universally disliked 1997 Medicare payment formula known as the “sustainable growth rate,” it won’t have to come up with nearly as much money as previously expected.

The sustainable growth rate, or SGR, has been a perennial problem because it would pay doctors much less than they currently get for treating Medicare patients. Every year, Congress reverses the formula to keep payments from dropping, but only for a short period of time. In January, the latest one-year fix passed as part of the fiscal-cliff package.

This week, two proposals for reversing the SGR forever began circulating on Capitol Hill. On Wednesday, Reps. Allyson Schwartz, D-Pa., and Joe Heck, R-Nev., introduced a bill that would replace the formula with a temporary system of physician pay raises, to be followed by new payment methods that would reward more-efficient care.

I'm not sure I'd go so far as to say I think that a permanent doc fix is now likely. But unlike before, I do think it has a chance. 

For those who prefer transparent budgeting, that's a good thing: Congress was never likely to let the cuts go through, which means that the money was already going to be spent. A permanent fix would mean that future budget projections no longer include the implausible assumption that Congress will actually allow the cuts. It would also relieve doctors of the nagging worry that maybe, just maybe, Congress won't pass an ov

Still,  I remain skeptical that fixing the doc fix really fixes much of anything. For one, the CBO generated its newly lower price tag by assuming that we won't spend as much on Medicare in future years as previously thought, which is far from guaranteed. For another, Congress would replace the SGR with some other payment mechanism. And while it probably wouldn't create budget complications of the same magnitude, it would probably come with flaws and distortionary effects of its own. 

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  • Ornithorhynchus||

    In all the dozens of times I've been in the hospital, they never once gave me any Canada Dry. Should I sue for malpractice?

  • Sevo||

    Ornithorhynchus| 2.7.13 @ 3:12PM |#
    "In all the dozens of times I've been in the hospital,..."

    Ugh! I hope you were there because you work there.

  • Anonymous Coward||

    I hear some of those Herpes outbreaks can be truly painful. A few sips of Canada Dry probably eases the pain slightly.

  • Sevo||

    ..."the CBO generated its newly lower price tag by assuming that we won't spend as much on Medicare in future years as previously thought,"...

    Uh, are we planning on dropping Pall Malls and 5-cheese pizzas from helicopters?

  • R C Dean||

    That's it? They just "assumed" away billions of dollars in future spending?

    Man, that was easy.

  • Way Of The Crane||

    For one, the CBO generated its newly lower price tag by assuming that we won't spend as much on Medicare in future years as previously thought, which is far from guaranteed.

    Apparently the answer to all our budget problems is the same as the cause: Deny reality and make shit up.

  • flye||

    The CBO slashed the estimates in part because states are opting out of the ACA medicare expansion, since the SC said they could. But those people who would have been covered by medicare will be eligible for 'support' through federally funded insurance exchanges, which cost the feds more on balance.

  • R C Dean||

    But those people who would have been covered by medicare will be eligible for 'support' through federally funded insurance exchanges, which cost the feds more on balance.

    Actually, no. The way the bill is written, there is a gap in coverage created when a state refuses teh medicaid expansion.

    The subsidies were written on the assumption that medicaid would be expanded in every state, so they don't go to people who would have been covered by a medicaid expansion.

  • Anonymous Coward||

    The sustainable growth rate, or SGR, has been a perennial problem because it would pay doctors much less than they currently get for treating Medicare patients. Every year, Congress reverses the formula to keep payments from dropping, but only for a short period of time. In January, the latest one-year fix passed as part of the fiscal-cliff package.

    The solution to this problem is obvious: Pass a law that the only way to legally pay doctors is either via Medicare or an insurance policy.

    Congrats, docs. You are all our slaves now.

  • ||

    I thought this was going to be about Groovus getting a vasectomy after drinking too much vodka.

  • Josua||

    I favor following constitutional law and ending federal programs like Medicare. If only the 300-and-something million people who impersonate Americans in this country would get out of the way, the whole government interference in the economy thing could be solved.

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