Medicare Melting Down: Congress Still Avoiding Permanent Fix

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Legislative Affairs Feature - May 2010  

Tex Med. 2010;106(5):31-35.

By  Ken Ortolon
Senior Editor

Texas Medical Association leaders say there is no doubt members of Congress understand the importance of fixing the broken Medicare physician payment system. They understand it. They just haven't done anything about it.

For years, TMA, the American Medical Association, and other groups have pounded home the message that continued cuts or freezes to physician payments driven by the unsustainable Sustainable Growth Rate (SGR) formula undermine the entire health care system.

"They understand it now. They get it," said new TMA President Susan Rudd Bailey, MD, of Fort Worth. "They realize the overall implications to the entire payment system of continued Medicare rate cuts."

In spite of an intensive advocacy effort by TMA and other groups, Congress failed to include an SGR fix in the recently passed health system reform law. What's worse, lawmakers adjourned for their spring recess in late March without even temporarily halting a scheduled 21.3-percent Medicare physician rate cut. That cut took effect April 1, although the U.S. Centers for Medicare & Medicaid Services (CMS) immediately instructed Medicare contractors to hold claims submitted on or after April 1 for 10 business days to give Congress a chance to enact another temporary fix when it returned.

Dr. Bailey and other TMA leaders say the enactment of health system reform makes it even more critical that Congress finally overcome its "sticker shock" and fix the Medicare physician payment system. Otherwise, increased access to care promised under the new reforms could be in jeopardy, they say. 

Fixing the Foundation

The 21-percent payment reduction is part of a 10-year pattern of threatened cuts, reversed cuts, and constant uncertainty. Fixing the Medicare payment system is a crucial component of health system reform because of the role Medicare plays in driving payments for government and private health plans.

But lawmakers have been reluctant to act on the SGR fix because the price tag has ballooned over the years to more than $200 billion. Most of that cost is for payments already made for care already provided.

However, passing health system reform without addressing the Medicare physician payment system, TMA officials say, is like building a new house on a crumbling foundation.

Dr. Bailey says physician payments in the TRICARE system that covers military families, in Medicaid, and even in private health plans are closely tied to Medicare payment rates. If Congress does not reverse the 21-percent cut and solve the problem, physicians could begin bailing out of both Medicare and Medicaid, she warns.

That could be devastating for health system reform, as a huge percentage of the 32 million who would be covered under the bill would go into the Medicaid program.

"Certainly, if the cuts go into effect, you'll see many physicians opting out of Medicare and Medicaid who might have been able to afford to continue seeing Medicaid patients if they were getting adequate Medicare reimbursements," Dr. Bailey said. "It will just snowball into a lack of access throughout the system. And the plan to take care of seniors through Medicare and to take care of a good percentage of the uninsured by adding them to the Medicaid rolls just won't work."

An informal poll of physicians the AMA released in late March found that 68 percent will limit the number of Medicare patients they can treat because of the cuts.

"One month ago when Congress delayed this year's 21-percent cut to April 1, we urged them to use this time wisely to repeal the payment formula that projects these cuts," AMA President Jim Rohack, MD,   said when Congress left for its recess. "It is unconscionable for elected officials to play politics with seniors and military families who rely on them to preserve their ability to see the physician of their choice. Seniors, military families, and their physicians need to let their members of Congress know that decisions made in Washington have real-world consequences and that their inability to take permanent action on this critical issue is unacceptable."

William H. Fleming III, MD, TMA's immediate past president, says physicians are "extremely frustrated" with Congress' inaction on the payment fix. Dr. Bailey agrees.

"It's just unbelievable to me that of all the things thrown into the health system reform legislation, Medicare was left out."

Wichita Falls pathologist Susan Strate, MD, chair of the  Texas Medical Association Political Action Committee , says continuing a payment system that doesn't take into account the increases in the actual cost of providing care is illogical.

"Physicians' practices are businesses," Dr. Strate said. "Doctors hire nurses and receptionists; they have expenses in their offices; they must buy equipment. And it makes no sense from a business standpoint to have a payment system that doesn't take increases in those costs into account."

U.S. Rep. Lamar Smith (R-Texas) called the current system "unreasonable" because it "unfairly burdens physicians and threatens the ability of Medicare patients to access the health care that they need. We need a permanent solution to protect seniors' access to affordable health care and ensure physicians can serve their patients."

Representative Smith said changes to the fee formula "should have been included in the health care bill, yet these changes were removed as a budget gimmick to hide costs. While Congress continues to debate short-term fixes, patients and physicians deal with the consequences. Congress needs to enact a permanent fix to solve the flawed accounting and budgeting of the SGR formula." 

Getting Social

TMA is waging an aggressive campaign to fight the looming Medicare meltdown with a five-part plan that couples good old-fashioned hands-on lobbying with the power of social networking and other media.

In late February, Dr. Bailey, Dr. Strate, and other TMA leaders went to Washington, D.C., to meet with Texas senators and representatives to make a personal pitch for a permanent SGR fix.

At the same time, TMA warned Congress that its failure to act was threatening the stability of Medicare.

"Texas physicians have pleaded with Congress to fix Medicare for the past decade. It is the insurance senior citizens and people with disabilities depend on for health care," Dr. Fleming said at the time. "It is what our country has promised them. All of us have paid into the Medicare system. We need a permanent solution to protect Medicare. Elderly patients, people with disabilities, and families in the military deserve secure and stable health care."

TMA and county medical societies also submitted opinion articles and editorials to newspapers across the state and worked to engage patients through TMA's Web site, as well as through social networking sites such as Facebook, YouTube, and Twitter.

Patients and physicians have been logging on to to access links that allow them to send messages to their senators and representatives, as well as letters to the editors of their local newspapers. At press time, that effort had generated more than 4,500 e-mails to Congress urging support for a permanent SGR fix, including more than 1,000 from patients and more than 3,500 from physicians.

TMA also posted simple and compelling videos on TMA's YouTube channel and created Twitter petitions aimed at influential Texans in Congress. To access all of these tools, go to  TMA's Medicare Meltdown Action Center .

TMA leaders urge physicians to share those videos with their social networks, join the Facebook cause, and sign the Twitter petitions so they will be distributed automatically to followers on their networks.

Also, an  online petition  had generated more than 800 signatures in support of a permanent SGR fix. 

Battle Rejoined

While those efforts have not yet resulted in a Medicare payment fix, Dr. Bailey says the SGR battle isn't over by a long shot.

"We've got to keep pounding the message," she said. "The Texas Medical Association and other colleagues in the house of medicine are in a unique position to be able to analyze the health reform legislation and see how the lack of an SGR fix impacts it. I think our best hope of fixing the SGR permanently is selling the idea that health system reform won't work without it."

However, that may be a tough sell. Some TMA leaders say Congress may never muster the political will to deal with the issue until huge numbers of physicians drop out of Medicare.

"I have heard some congressmen say they don't believe that this will cause an access problem and they won't fix it until they see a crisis related to lack of access," Dr. Strate said. "Now that's not a wise approach, but it's a belief held by some."

TMA leaders hope it does not reach that point, and they say they will engage both physicians and patients in the fight to fix the system.

"I think we're just scratching the surface of what we can do with social networking," Dr. Bailey said. "As time goes on and people become more used to seeing information come from TMA through some of these newer media opportunities, they will be more effective. I think we haven't come anywhere close to harnessing the power of our patients in the political process, but it's a start."

Ken Ortolon can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by e-mail at  Ken Ortolon.   

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