Language in President Obama’s fiscal year 2014 budget proposal on fixing Medicare’s physician payment system is strikingly similar to that being used by House Republicans, which could add further momentum to the drive to adopt a permanent fix this year, according to physician and stakeholder groups.
Stakeholders say language in the White House plan, released April 10, in many ways mirrors that being used by House Republicans on such subjects as allowing for a period of stable payments while new payment models are developed and implemented, and linking payments to the delivery of quality care.
“The administration supports a period of payment stability lasting several years to allow time for the continued development of scalable accountable payment models,” the White House budget plan says. “Such models can take different forms, but all will have several common attributes such as encouraging care coordination, rewarding practitioners who provide high-quality, efficient care, and holding practitioners accountable through the application of financial risk for consistently providing low quality care at excessive costs.”
The House Energy and Commerce and Ways and Means committees have released the second draft of a permanent physician payment fix plan and say they hope to have legislation on the House floor by the August congressional recess. Their draft contains language on implementing quality-of-care reimbursement measures that also reward providers for delivering high-quality care.
Significant Similarities
The language similarities between the White House and congressional proposals “is significant because it means, conceptually, the administration accepts the same path towards a permanent fix as do the House committees of jurisdiction,” said Julius Hobson, a policy adviser at Polsinelli Shughart PC in Washington, D.C.
The White House language “is also significant because its timing comes early enough in the year to provide momentum towards a final solution,” Hobson added. He noted, however, that “as always . . . much will depend on the budget offsets proposed to pay for a permanent fix.”
Dan Boston, executive vice president of consultant Health Policy Source Inc., said, “The administration’s reinforcing the House Ways and Means and Energy and Commerce efforts on [the sustainable growth rate formula] can only further reinforce the momentum that can—and should—build behind congressional reform efforts.”
Medicare’s sustainable growth rate (SGR) formula is designed to ensure that yearly increases in costs per Medicare beneficiary do not exceed the growth in gross domestic product.
Despite similarities between the permanent physician pay fix proposals by the White House and House Republicans, stakeholders say significant hurdles to creating a new system remain, including how it will be paid for. The Department of Health and Human Services has not yet devised a way to pay for a “doc fix.”
But stakeholders and lawmakers say a new lower-cost estimate for a fix provides the best opportunity in years for action. The Congressional Budget Office has lowered by more than $100 billion the price tag for freezing physicians’ pay to $138 billion over 10 years, due to lower-than-expected Medicare spending.
House Republicans have said they are focusing on developing the right doc fix policy before trying to find ways to pay for it, although some lawmakers have suggested that Medicare reforms included in a doc fix bill could save enough money to pay for it.
Funding Needed
House Republicans also are wary that including funding provisions opposed by Democrats, such as from the Affordable Care Act, could doom passage of a doc fix bill in the Senate.
Physicians’ Medicare reimbursement will be reduced about 25 percent in 2014 unless Congress acts. The physician payment system has produced pay cuts for doctors for about a decade, but Congress has overridden them. A permanent fix repealing the SGR has not been approved by lawmakers in the past because of cost.
The American Medical Association in a statement praised the White House doc fix language, saying it “aligns with many of the principles developed by the AMA and 110 other physician organizations on transitioning Medicare [from the current payment system] to include an array of accountable payment models.”
“It is critical for physicians to have a period of stability and the flexibility to choose options that will help them lower costs and improve the quality of care for their patients,” AMA said. “We are encouraged that the president and members of Congress are focused this year on eliminating this failed formula and strengthening Medicare for patients now and in the future.”
