As reported on this website, the U. S. House of Representatives has signed on to an additional six month "fix" for the unacceptable 21 percent reduction in Medicare physician reimbursements required under current law. So ends yet another sad and frustrating chapter in an extended epic of Congressional dithering on healthcare policy. For years, the perceived political cost has dissuaded Congress from any frontal effort to revise the wrong-headed and obviously ineffective 10-year-old sustainable growth rate (PDF) formula for limiting growth in Medicare spending or physicians’ services. But the end of the tale is far from resolved and the political stakes can only get higher. Let’s look ahead a few months. Here is what seems certain:
- Absent a serious effort to address the faulty SGR mechanism, the new implementation delay will expire at the end of November and the required reduction will once again loom.
- Congress has a full policy plate right now and is unlikely to add a politically difficult agenda item with summer break looming; the legislative window for a real fix before re-institution of the cuts will for all practical purposes be September and October. But this year, those are months in which every member of the House and a third of the Senate will be running for reelection in what promises to be a very heated and unusually unsettled campaign season. Efforts to address the physician payment problem between now and the election will be subject to intense partisan posturing and will inappropriately but inexorably be conflated with the volatile debate about this year’s healthcare reform legislation. While collective logic demands confronting the issue, individual electoral logic is likely to dictate otherwise.
- Passing a real fix after the early November election, if nothing is done sooner, will fall to a Congress with what is widely projected to be a higher than usual number of "lame duck" members — members defeated for reelection and going home for good at the end of the term. For some, this may provide license, free from electoral considerations, to do what they think is best, rather than what is electorally advantageous. Others, with an eye to their next political goal, may try to avoid any hint of post-election controversy. Leadership, however, will certainly strive to reflect some sensitivity to what their spin-masters tell them is the mid-term electoral mandate.
- In the meantime, the Centers for Medicare and Medicaid Services are deep into the process of preparing a Notice of Proposed Rule Making for the 2011 Medicare Physician Fee Schedule, a document that must be available to the public in early July — no more than two weeks from now. That document will of necessity reflect current law, meaning proposed payments beginning January 1, 2011, calculated under the current SGR formula; informed estimates are that the proposed SGR "hit" to physicians in 2011, reflecting the multi-year compounding of the SGR control mechanism, will approach 30 percent.
- The Physician Fee Schedule Final Rule with rates for 2011 will need to be published on or about November 1, 2010, a scant week before the nation votes.
For nearly six years, Congress has annually prevented implementation of the rates mandated under the SGR restriction on Medicare physician payment in order to blunt the consequent adverse systemic effects while postponing any truly corrective action. Each year the gap between mandate and acceptable reality has grown, the need to take corrective action has grown and the political and economic costs of any corrective action have also grown. It is like trying to douse a fire with gasoline.
No one knows how all of this will end. There are too many high-stakes political pieces in play. I’ll venture a guess, however, based on nothing but the examples provided in recent years that prove — to paraphrase H. L. Mencken’s famous statement — that no one ever went broke over-estimating the political gutlessness and general fecklessness of the U.S. Congress:
- Nothing will be done before the election, as candidates blame their opponent, or their opponent’s party, for both the error and the impasse.
- opponents of healthcare reform will argue — falsely but in some cases effectively — that the looming physician reimbursement reduction proves that health system reform was from the start predicated on the twin pillars of payment and service reductions; the politics will be net negative for Democratic incumbents.
- The sheer size of the 2011 reimbursement cut will eventually force a legislative solution, as members of both parties position themselves as having to do something they don’t like in order to protect Medicare beneficiaries from disaster. They’ll conveniently maintain silence on their own role in creating and perpetuating that disaster.
- Nevertheless, debate about what to do will extend through at least the first quarter of 2011, necessitating several more rounds of last-minute, or after-the-last-minute, moratoria.
This is what we’ve come to. Congress is institutionally paralyzed, by the weakness of its parties, by it outmoded procedural rules, by the absence of leaders able to provide the public with cogent explanations of complex issues, by the abysmally retrograde quality of political debate, and is capable of decisive action only when confronted by imminent disaster. The fact that in the case of Medicare physician payment, that looming disaster is of the Congress’ own making only strengthens the indictment. The members have no one to blame but themselves. But we are all, one way or another, the potential losers.
I’ve inveighed in previous posts here against Congressional micromanagement of healthcare reimbursement issues. There is a long history of legislating good principles and then gutting them from year to year in response to industry lobbying. And while the American Medical Assn.’s lobbyists are out in force right now, the real problem today lies with Congressional inability to address policy at the general level — to recognize that the SGR doesn’t work, has pernicious unintended consequences and must be replaced by something different. And yet we need legislative action to determine the macro policy elements of solutions to the problems of healthcare accessibility, quality and affordability. I’m usually an optimist on these matters, but …
Edward Berger is a senior healthcare executive with more than 25 years of experience in medical device reimbursement analysis, planning and advocacy. He’s the founder of Larchmont Strategic Advisors and the vice president of the Medical Development Group. Check him out at Larchmont Strategic Advisors.