Physician reimbursement rate fix would cost $276 billion, CBO estimates

If lawmakers ever get around to permanently fixing the long-delayed Sustainable Growth Rate formula, which will cut physician Medicare payments by 21 percent if not addressed by June 1, it will cost more than they initially bargained for. Freezing the current Medicare payment rates would cost roughly $276 billion over the next decade, a 33 percent increase from the initial estimated cost of $207 billion, the Congressional Budget Office has determined. A five-year fix would cost nearly $89 billion,  CongressDaily reports.

J. James Rohack, president of the American Medical Association, has continuously lobbied for a permanent fix--so far to no avail. "We want to keep people healthy, and this formula penalizes [doctors] for doing the quality care you want," Rohack said, according to an NPR News report. He pointed to such acts as helping patients control their blood sugar and keeping heart failure patients out of the hospital as examples of how doctors can run up their spending, ultimately leading to the pay cuts. 

The constant uncertainty related to the stopgap measures has caused many physicians to stop accepting Medicare patients. "The reason I opted out is because the reimbursement rates were low, the amount of paperwork was exceptionally high, and the fees--even if you made an innocent error--could be up to $10,000 per incident," said Dr. Juliette Madrigal-Dersch, a Texas-based physician who stopped taking Medicare patients four years ago, according to American Medical News. "Why would you sign up for something that would guarantee to pay you less over time when you're expected to work harder?" 

Rohack added that with each temporary fix, the cost continually climbs higher to provide a multiyear fix. 

"They could have fixed this three years ago for less than $50 billion," Rohack said. 

To learn more:
- read the Congress Daily report (sub. req.)
- read this Kaiser Health News brief
- read this NPR News article
- check out this California Healthline piece
- read this American Medical News article