Is there any hope for the Medicare system?

Karen Cheung-Larivee

 Karen Cheung-Larivee

There may be hope for the Medicare system yet. A few key pieces came into place this week that sound promising: White House support, a new bipartisan bill and new Congressional Budget Office estimates that could usher in a permanent solution to the sustainable growth rate--the dreaded formula that slashes Medicare payments automatically each year.

Although Congress has routinely avoided cuts with multiple stopgap measures, usually at the 11th hour, providers are still subject to the threat of the physician payment schedule each holiday season. But it's no present for providers. The fiscal cliff deal (the American Taxpayer Relief Act of 2012) staved off a 25 percent reduction in Medicare reimbursement only until Jan. 1, 2014.

But some major announcements this week from Washington signal that cycle could be coming to an end. President Obama on Tuesday urged Congress to permanently fix sequestration. On the same day, the Congressional Budget Office downgraded its estimates of how much it would cost to repeal the SGR, from $245 billion to the more palatable estimate of $138 billion.

And Reps. Allyson Schwartz (D-Pa.) and Joe Heck (R-Nev.) on Wednesday introduced a bipartisan bill to permanently repeal the SGR. The Medicare Physician Payment Innovation Act promises to favor pay for performance over fee for service.
The bill has the backing of more than a dozen provider groups, including the American Academy of Family Physicians and the American College of Physicians, but the American Medical Association stopped short of throwing its full support behind the bill.

AMA CEO and Executive Vice President James Madara previously called the doc fixes--16 of them since 2003--a "continuing game of political chicken [that] is unacceptable and dangerous to the future of the Medicare program."

The AMA did say it was important piece of legislation.

Still, there's the tiny issue of where the funds will come from. Reps. Allyson Schwartz (D-Pa.) and Joe Heck (R-Nev.) left out war funds this time around, presumably to gather support, while they cross their fingers it passes in the Senate.

"It is time to bring Medicare into the 21st century," Ways and Means Chairman Dave Camp (R-Mich.) said Thursday. Medicare hasn't significantly changed since it first launched the fee-for-service payment model in 1965.

The Act, plus the added bonus a new Congress inaugurated last month, points to renewed efforts to fix it and this time for good.

Still, some providers aren't holding their breath to see if both sides of the aisle can actually end the vicious cycle. - Karen (@KCheungLarivee / @FierceHealth)