Band-Aids Won't Fix Medicare Payment Problems


July 1 marked the debut of several features in this year’s healthcare reform legislation, including the acceptance of uninsured applicants to high-risk insurance pools. For many hospitalists and other doctors, however, the new arrivals only heightened their disappointment over the legislation’s lost opportunity: a permanent fix to the flawed sustainable growth rate, or SGR, that dictates Medicare reimbursements.

“It should have been taken care of in that bill,” says Ron Greeno, MD, SFHM, a member of SHM’s Public Policy Committee and CMO of Brentwood, Tenn.-based Cogent Healthcare. “Obviously, there’s a lot of frustration around the issue, especially on the membership side.”

June provided a stark reminder of the potential for catastrophe should the annual rate cuts to Medicare reimbursements to physicians—21.3% to date—ever go into effect. Congress eventually pushed through yet another temporary fix, delaying any cut from June 1 until Dec. 1 (after the midterm elections, of course) and even tacking on a 2.2% increase. But the House didn’t pass the extension until June 24, nearly a week after the Centers for Medicare & Medicaid Services (CMS) began processing June claims at the lower rate.

By that point, some doctors had begun refusing to see Medicare patients. Both doctors and hospitals have since had to resubmit some June claims to gain the full value, creating new headaches and expenses over the additional paperwork. “It’s wreaking havoc on the provider community,” Dr. Greeno says. “The uncertainty that has been created around these short-term fixes is very disquieting.”

Doctors and hospitals have had to resubmit some June claims to gain the full value, creating expenses over the additional paperwork. And then, of course, there’s the new Nov. 30 deadline facing a lame-duck Congress. As politicians continue dithering over a permanent fix and an accompanying price tag of $250 billion or more over a decade, CMS has announced next year’s rate cut. With a 6.1% decrease slated to take effect on Jan. 1, 2011, the combined SGR-mandated drop would reach nearly 30%. Ouch.

Find out the latest information on SGR reform and contact your legislators in support of permanent repeal through SHM's Legislative Action Center.

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