The chorus of reformers seeking a permanent solution to the perennial congressional Medicare “doc fix” continues to grow. David Hogberg of the National Center for Public Policy Research tackles the topic in a new column.
Dr. John Slatosky, a primary care physician in rural North Carolina, says, “I just couldn’t see myself as anything but a country doctor.”
But Medicare is making it harder for him to stay true to his calling.
Like nearly a fifth of all physicians, Dr. Slatosky is no longer taking new Medicare patients. The most recent National Ambulatory Medical Care Survey found 17 percent of physicians no longer do.
A key culprit? Medicare’s Sustainable Growth Rate (SGR) formula, one of the worst features of Medicare, and one Congress should have eliminated long ago.
The SGR is designed to cut physician fees paid by Medicare automatically whenever those fees exceed an expenditure target set by federal law.
It’s intended to be a cost-saving measure, but more than a decade worth of evidence proves it doesn’t work.
Medicare payments first exceeded the SGR target in 2001, resulting in a March 2002 5.4 percent cut in reimbursement payments to physicians. But doctors’ groups protested. They’d done the work, so why shouldn’t they be paid?
Mindful that doctors vote, Congress caved. But instead of repealing the unworkable SGR altogether, Congress kicked the proverbial can down the road. It temporarily suspended a subsequent 2003 SGR cut while approving a 1.6 percent increase in physician fees.
This process has become known as the “Doc Fix.” Every year or two the temporary suspension of the SGR cut runs out. Congress then imposes another temporary suspension along with a 1 to 2 percent increase in fees.
Successive applications of the Doc Fix have dramatically widened the gap between the SGR expenditure target and what Medicare actually spends. If the Doc Fix is ever abandoned, the cuts will be huge.
This isn’t a hypothetical: If Congress does not apply yet another Doc Fix soon, suspending the SGR cut scheduled for January, physician reimbursements under Medicare could be cut by as much as 25 percent.
Dr. Slatosky foresaw trouble long ago: “It was in 2007, when the [SGR] cut was going to be about 10 percent. Then, Congress came in at the last second and stopped it. But the news stories noted that Congress would have to come in and suspend it again in six months. I pretty much saw the writing on the wall that this was going to be a perpetual mess. You knew Congress was not going to fix it permanently.”
Uncertainty caused by the SGR is a major factor in causing more physicians to limit their exposure to Medicare. A 2010 American Medical Association survey found that over three-quarters of the physicians who limit the Medicare patients they see cited the “ongoing threat of future payment cut makes Medicare an unreliable payer” as a reason.
