Physician Groups Set 2011 Agenda: Medicare payment reform tops the list

Physician groups representing otolaryngologists have ambitious 2011 policy and legislative agendas that include pushing for replacement of the Medicare physician payment formula and helping to shape health reform’s implementation.

Medicare physician payment tops the to-do list. In late November, Congress passed a one-month reprieve from a 23 percent Medicare reimbursement cut that was scheduled to hit on Dec. 1. Then in early December, lawmakers approved a $19.2 billion, one-year freeze that prevented a 25 percent cut from kicking in on Jan. 1, 2011. President Obama signed the legislation into law on Dec. 15.

Buying Time

Although a 12-month stay is not ideal, it will give lawmakers time to pass a permanent replacement for the flawed reimbursement formula, said Kristen Hedstrom, American College of Surgeons (ACS) assistant director of legislative affairs. The formula “has been unsustainable for more than a decade now, so something has to be done,” said Pete Batra, MD, associate professor and co-director of the Comprehensive Skull Base Program at the University of Texas Southwestern Medical Center at Dallas.

A one-year fix should also prevent physician Medicare pay from becoming a political pawn in the early part of the new congressional session, Hedstrom said. Some Washington observers speculate that House Republicans might offer a bill that would finance a Medicare reimbursement solution with the repeal of the health reform law’s individual mandate and its accompanying subsidies for low-income Americans. The vote would be a political maneuver, however, because such legislation would likely fail in the Democrat-led Senate. Even if a bill were to pass, President Obama would veto it. A one-year fix would take such tactics off the table for now.

Although medical societies will push to replace the formula with a system that accurately reflects increases in the cost of practicing medicine, they realize it will be a hard sell. Freezing Medicare payment through 2020 would cost $275.8 billion, while providing a payment update that reflects the Medicare Economic Index would cost $329.9 billion, and a 2 percent annual update would cost $374.2 billion, the Congressional Budget Office estimates.

Lawmakers will have a hard time finding the money, Hedstrom said. “In order to get it, you have to cut something. What do you cut?” The Republican takeover in the House and its gains in the Senate intensify the funding question. “Many of the Republicans who won in November ran on no new taxes and reducing the deficit, so paying for a permanent fix will be extremely difficult within these parameters,” Hedstrom said.