For the past several years, the calculations have yielded results that would significantly reduce future Medicare payments. Yet these cuts have never been enacted because Congress realizes the repercussions of such a decision. Payment reductions are anathema to physicians and their implementation could lead to more doctors refusing to take care of Medicare patients. This would create anger and frustration for many Medicare recipients, and politicians are keenly cognizant that senior citizens vote. According to a recent analysis published in the U.S. News & World Report, 61% of citizens aged 65 or older voted in the 2010 election compared with just 37% of Americans between the ages of 25 and 44. Since 2002, Congress has displayed rare flashes of bipartisanship by voting to approve 14 temporary patches to avert the SGR cuts. Right now in 2012, we are facing a potential 30% reduction in Medicare fees for 2013.
Most legislators claim to be sympathetic to doctors, and many have gone on record decrying the folly of the SGR. Recently, four former Medicare administrators testified to the Senate Finance Committee that the SGR must be replaced with a better method of calculating future payments. However, in order for Congress to replace it, legislators must find another way to recover the cost of higher-than-anticipated Medicare payments to physicians.
The Devil Is in the Details
Most legislators claim to be sympathetic to doctors, and many have gone on record decrying the folly of the SGR. Recently, four former Medicare administrators testified to the Senate Finance Committee that the SGR must be replaced with a better method of calculating future payments. However, in order for Congress to replace it, legislators must find another way to recover the cost of higher-than-anticipated Medicare payments to physicians. Not surprisingly, the devil is in the details. The budget fix required to correct this problem once and for all is estimated to be $300 billion. During our visit, it was pointed out that, had the fix occurred a few years ago, the cost would have been substantially less. As one Congressional chief of staff lamented, there is little interest in Congress in passing legislation that could save more money in the future; given the current political climate, he stressed that the savings must occur immediately, even if the proposal ends up saving less money in the future.
So, how will the government pay to correct the SGR? Simply stated, the SGR legislative fix is based on rules that sound eerily similar to those of a childhood game known as “chicken.” In the Washington version, there are multiple players, representing both parties in the House and Senate as well as the White House. The strategy is simple: each participant waits to see whether their opponents blink first and accede to their demands. The game gets even more exciting as the legislative session’s clock starts to wind down. For example, the SGR fix for 2012 was passed after the 2011 Congressional session had ended. But wait—how could Congress pass a law after the deadline? We are dealing with Congress. They are free not only to play the game but to serve as their own referees, too.