Volumne 12, Issue No. 1
February 4, 2014

The ‘Doc-Fix’, ‘Doc Patch’, ‘SGR’…

The Sustainable Growth Rate (SGR) passed Congress in 1997 is a formula used to reduce Medicare spending on providers and keeps Medicare spending in check. It has become a political can that congressional members just kick down the road.  Since the law was enacted in 1997, Congress has passed short term fixes that keep the SGR from going into full effect rather than taking its medicine and make some tough decisions to fix the problem once and for all. The SGR, if let to go into effect, would cut Medicare provider payments by 29 percent.

On January 17th, the House voted 293 to 132 in favor of the Conference Committee’s solution to the potential cut to providers.  The Senate followed the House vote shortly after by passing the bill with a comfortable margin, 60-36. They will again have to open the SGR-Pandora’s box in December of 2012.

The payroll tax conference committee’s final proposal, that includes the SGR fix, is perceived to hit hospitals and preventive health the hardest. According to the National Journal;

  • the agreement hacks $6.9 billion in government subsidies to hospitals whose Medicare patients fail to pay premiums and co-pays;
  • $5 billion from a preventive health fund established in the 2010 health reform law;
  • $4.1 billion from hospitals that treat a disproportionate share of patients without health insurance;
  • $2.7 billion from cutting reimbursements for clinical lab tests; and
  • $2.5 billion from the Louisiana Medicaid budget.

The final passage of the payroll tax bill was seen as a success.  However, the legislation did not include a way to fully pay for the provisions, or what is known on the Hill as a “pay-for.”  Congress gets 10 months to figure out how to address the growing precipice that Medicare providers face. 

April Canter

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