What happened on Thursday, April 16, was nearly two decades in the making. After 18 years and 17 short-term patches, President Obama signed a $214 billion Medicare reform package (HR 2) that addresses issues that have long plagued physicians and their patients. Dubbed the “doc fix,” the Medicare Access and CHIP Reauthorization Act (MACRA) permanently ends yearly threats to cut Medicare payments to physicians, a practice that stems back to a 1997 law.
Explore this issue:June 2015
“We are very excited about it,” said James C. Denneny III, MD, executive vice president and CEO of the American Academy of Otolaryngology–Head and Neck Surgery (AAO-HNS), who has been lobbying, along with other members of the organization, to get the bill passed for 14 years. “It is very gratifying to have it finally come to fruition,” he added.
But Dr. Denneny was quick to note another aspect of the victory—its strong bipartisan support. The U.S. Senate passed the bill by a vote of 92-8, and the House approved it by a 392-37 vote. “The scope of this bill underscores what can be accomplished when lawmakers work in a bipartisan manner,” Dr. Denneny said. “To see the system work was very important to me.”
Jeffrey Kahn, MD, an otolaryngologist at the Texas-based Austin Ear Nose and Throat Clinic who serves on the Texas Medical Association’s Council on Health Care Quality, acknowledged the amount of effort that went into the bill’s passage. “It’s great that it passed, but it seems a bit like a hollow victory because so much work and resources went into fixing something that should have been fixed long ago and that clearly had broad bipartisan support.”
The Nuts and Bolts
The Medicare physician payment provisions are expected to help build a more sustainable, fair, and efficient Medicare physician payment system that results in high quality, affordable healthcare. The bill, negotiated by House Speaker John Boehner and House Democratic Leader Nancy Pelosi, calls for spending $214 billion over 10 years, with $73 billion offset by spending cuts or new revenue.
The new law includes provisions that address several legislative priorities set forth by the AAO-HNS. Among these are the permanent repeal of the flawed sustainable growth rate (SGR) formula used to determine payments to physicians under the Medicare program. “This represents a great improvement in Medicare payment for patients and physicians,” said Gregory W. Randolph, MD, director of the general otolaryngology and thyroid surgical divisions at Massachusetts Eye and Ear Infirmary and Harvard Medical School, Boston. “As a result of this, a 21.2% physician pay cut was avoided.”
—Jeffrey Kahn, MD
The flawed payment formula has caused ongoing uncertainty with regard to whether or not physicians could profitably take on Medicare patients. “Several colleagues were concerned that their salary may be cut when it seemed like the cuts would actually go through,” Dr. Randolph said. “For private practitioners, it must have been even more stressful, as it would directly and immediately cut their take-home pay and affect their practice’s cash flow.”