With a deep 29.5 percent cut to Medicare reimbursement still scheduled to hit physicians on Jan. 1, the Medicare Payment Advisory Commission (MedPAC) has proposed a plan that would kill the sustainable growth rate (SGR), but not without sacrifices from health providers and beneficiaries.
The proposed fix, which requires congressional approval, would impose a 10-year freeze of Medicare pay for primary care physicians. Specialists would get a 5.9 percent pay cut for three years, followed by a seven-year freeze.
By not cutting primary care pay and reducing specialists' reimbursement temporarily, MedPAC estimates the cost of SGR repeal to rest around $200 billion, Healthcare Finance News reports. Rather than resorting to deficit spending, the proposal includes $235 billion in offsets that would come from cuts to Medicare Part D drug plans (32 percent), post-acute care facilities (21 percent), hospitals (11 percent), laboratories (9 percent), suppliers of durable medical equipment (6 percent), Medicare Advantage plans (5 percent), and other providers (2 percent), with an additional 14 percent carved out of Medicare benefits to seniors.
MedPac's plan, scheduled for a vote in early October, has been met with disapproval from several physician groups, including the American Medical Association (AMA), American College of Surgeons (ACS), American Osteopathic Association, and Alliance for Quality Nursing Home Care.
"The misguided scheme discussed by MedPAC to replace the nearly 30 percent cut to physicians scheduled for January 1 with a new series of very significant cuts will harm patients and physicians in the Medicare program," AMA President Dr. Peter Carmel said in a statement. Since 2001, Medicare reimbursement has failed to keep pace with the cost of running a medical practice, Carmel added. "Further drastic cuts pose a very real risk to physicians' ability to retain staff, care for Medicare patients and make the investments needed to modernize their practices and participate in care delivery models intended to improve quality while reducing costs in the Medicare system."
While ACS praised MedPAC for recognizing the need to eliminate the SGR, it also criticized the commission for undervaluing the role of physicians. "We do not believe that cuts are the answer," ACS said in a statement. "We believe that a replacement of the SGR needs to be created that leverages quality, bends the cost curve, pays down the SGR debt and incentivizes value in the future."
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