Physician Pay Cut Delayed, Industry Eyes Opportunity

WASHINGTON — Flexing its considerable lobbying clout, the
American Medical Association helped convince Congress to delay a
21 percent Medicare
physician fee cut once again. The move came April 15 when
lawmakers applied yet another stopgap measure
to avoid what AMA President J. James Rohack, MD, called a “Medicare
meltdown for seniors.”

Rohack’s general comments framed the organization’s bid to
change Medicare’s “sustainable growth rate,” or SGR, physician
payment formula — which has resulted in annual pay decreases
for physicians — in favor of a permanent fix.

“Congress must now turn toward solving this problem once and for
all through repeal of the broken payment formula that will hurt
seniors, military families and the physicians who care for them,”
Rohack said in a press release. “It is impossible for physicians to
continue to care for all seniors when Medicare payments fall so far
below the cost of providing care.”

Home care providers have long feared the so-called “doc fix,”
believing that Congress would seek cuts to HME reimbursement as a
way to cover its cost. With the latest temporary measure (included
in The Continuing Extension Act of 2010) set to end on May 31,
industry advocates instead see an opportunity to include a
provision to repeal competitive bidding in what will
likely be a move by Congress to enact a permanent fix in the months
ahead.

Walt Gorski, vice president of government relations for the
American Association for Homecare, points out that everything
competitive bidding initially set out to do has already been
accomplished through accreditation, surety bonds, enhanced
standards and more accurate payments. “Therefore, there really is
no need to implement a risky program that will create so much
damage,” said Gorski. “We are looking at trying to get competitive
bidding language included in the next bill that addresses the
physician payment issue, or other vehicles where health care issues
are raised.”

The most important issue, added Gorski, is to get H.R. 3790, the
bill that would repeal competitive bidding, scored by the
Congressional Budget Office. If the CBO comes back with a favorable
score, all eyes will again focus on the number of cosponsors, which
currently stands at 203.

If the bill can garner at least 216 cosponsors, a majority in
the House of Representatives, John Gallagher, vice president of
government relations for the Waterloo, Iowa-based VGM Group,
believes the legislation could move out of committee and gain a
foothold.

“Leadership will see that there is support for this to be able
to move it either with a Medicare corrections bill later this year,
or with a doc fix sometime this summer or early fall,” Gallagher
said in a recent legislative update. “Once we get to that 216 to
220 figure, it also gives the Senate an idea that they have support
on the House side to get this legislation moved, and we can move a
companion bill into the Senate.”

According to press reports, Jonathan Blum, director of CMS’
Center for Medicare Management, agrees that changes to the
physician payment system are warranted. “The Administration has
repeatedly stated that the formula that determines what physicians
and others are paid under the Medicare Physician Fee Schedule is
broken and needs to be fixed,” said Blum in a statement. “We will
continue to work with Congress to find a long-term solution.”

The current delay is effective retroactive to April 1, when the
21 percent pay cut took effect. CMS had been holding physician
claims while waiting for congressional action on the cut.