Will Congress stop Medicare cuts again?

March 30, 2010|By Gene M. Ransom III

The Ticking Time Bomb That Could Scuttle Health Care Reform

The congressional debate over reforming the nation's health care system is now complete. Yet, the challenge of quality care for our citizens is far from resolved.

On Thursday, unless Congress acts, Maryland physicians and their colleagues across the nation will face an across-the-board cut of 21.2 percent to Medicare reimbursements, with more cuts expected to follow in the coming years. Given the current precarious state of the health care delivery system, a jolt of that magnitude would send it into shock. It's been documented in Maryland and across the country that a 21 percent cut in Medicare reimbursement would create huge shortages in physician access. The irony? All this pain and suffering can be avoided by eliminating the flawed formula that was supposed to create efficiencies.

For the past 13 years, the sustainable growth rate formula, or SGR, has hung over Medicare like Damocles' sword. While well-intentioned when it was included in the Medicare reimbursement formula in 1997, it has never been implemented. Congress has passed legislation every year since 1997 to avert the cuts that the sustainable growth rate formula requires. The reason is simple: Congress understands that cuts in compensation for care would reduce access to care and put more patients in harm's way.

Implementing the SGR would be ruinous to our health care delivery system. Medicare payments currently cover more than 51 percent of physicians' direct practice costs. Yet Medicare payments today are only 1 percent higher than they were in 2001. During that same period, the costs for a physician to run a practice have increased 22 percent as measured by the Medicare Economics Index.

A 21 percent cut in Medicare payments translates to $220 million a year in cuts for the care of the elderly and the disabled, as well as the 58,763 employees, 644,028 Medicare patients and 238,777 TRICARE patients in Maryland. And if physician reimbursement fees are cut by 21 percent, it will bankrupt practices across the state. No industry in Maryland can sustain a pullback of that magnitude and deliver service at the same level.

Of course, Congress is very unlikely to allow such draconian cuts to take place. It will no doubt put off the SGR day of reckoning once again, just as it has done for 13 years.

Enough. It is time for the federal government to stop relying on the budget gimmicks and temporary measures used in the past that have only raised the cost of implementing a permanent solution. Congress has to eliminate the SGR if it is serious about providing access to quality health care for all citizens.

Gene M. Ransom III is CEO of MedChi, the Maryland State Medical Society. His e-mail is gransom@medchi.org.

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