Patch, fix or cut: Physicians await their June 1 fate

May 17, 2010 — 11:13am ET | By Debra Beaulieu

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Sustainable Growth Rate formula
Medicare payment cuts
reimbursement cuts

Without Congress passing yet another extension in the next two weeks--which would mark the 10^th temporary patch to the problem in eight years and fourth for 2010--physicians will face a 21 percent cut in Medicare reimbursements as of June 1.

"It's hard to imagine this 21 percent cut actually being allowed to go through," Patricia Neuman, a vice president at the nonpartisan analysis group Kaiser Family Foundation, told CNN. "A cut of this magnitude would have a chilling effect on physicians."

However, Congress hopes to consider an extenders bill, similar to those used to enact recent short-term patches, before it plans to break for the Memorial Day recess May 28 through June 7. With related healthcare programs set to expire again, another such bill might offer a chance for a more substantial Sustainabe Growth Rate solution, reports American Medical News.

Long-term solutions floated by lawmakers include a five-year freeze of physician rates starting in 2011--which would cost about $89 billion, according to the Congressional Budget Office--or another multiyear solution that would cost the same. That spending would be exempt from a "pay-as-you-go" law enacted in February that requires lawmakers to find ways to offset certain spending increases or tax cuts.

Meanwhile, quick fixes keep getting more expensive. Although a permanent solution would have cost just $49 million in 2003, at this point, freezing doctors' rates for the remainder of this year alone would cost $6.5 billion, and a 26 percent cut would still loom for 2011. Freezing or increasing rates beyond 2010 would cost more and might require larger future cuts, notes AM news.

To learn more:
- read this California Health Line piece
- check out this American Medical News article
- here's the CNN Money article