Time to Clean Up the Medicare Doctor Payment Mess

Robert Moffit / November 18, 2010

Congressional Quarterly is reporting that the United States Senate is going to enact a one-month reprieve for Medicare physicians, saving them once again from a draconian reduction in Medicare payment.

This entire system is a mess. Under the existing Medicare payment formula (the Sustainable Growth Rate, or SGR) for doctors that the Senate and their House colleagues enacted in 1997, physician reimbursement is tied to the performance of the general economy. If in any given year Medicare physician payment outpaces the growth in the general economy, there is an automatic proportional reduction.

Routinely, Congress has blocked the annual payment reductions, but then, under the congressional formula, the payment reductions accumulate. Yet another flaw of the Patient Protection and Affordable Care Act is that it did not fix the physician payment problem. The result: This December, Medicare doctors will face a 23 percent cut in pay. A one-month extension of the reprieve would guarantee that the cuts next month would be even greater, requiring another congressional intervention. (more…)