Seelye suggests under House bill, future payments to doctors would be less than under current law

From Seelye's August 25 post, titled, “Dueling Words on Medicare”:

In the campaign for the hearts and minds of older Americans -- the cohort most nervous about a health care overhaul -- Michael Steele, chairman of the Republican National Committee, was on a news media tour Monday promoting a Seniors' Health Care Bill of Rights.

It says Republicans will, among other things, protect Medicare. And it accuses Democrats of “promoting a government-run health care experiment that will cut over $500 billion from Medicare.”

The main House bill in circulation would cut a combined $500 billion from Medicare and Medicaid over 10 years by limiting increases in payments to doctors and hospitals.

The Obama administration says some of the savings would come by increasing efficiencies, eliminating waste and establishing new ways of paying doctors -- although some experts question whether such savings could be achieved in so short a period.

In fact, CBO says future payments for doctors' services would be greater than under current law

Current law requires 21 percent cut in payments to physicians in 2010, which House bill cancels. The House bill changes the formula for reimbursing physicians, which is currently based on the sustainable growth rate formula and, absent congressional action, would require a 21 percent cut in January 2010. According to CBO's July 17 score of the House bill as introduced, “the net cost of the changes in physicians' payment rates would total $245 billion.” From CBO:

The provisions that would result in the largest savings include:

• Permanent reductions in the annual updates to Medicare's payment rates for most services in the fee-for-service sector (other than physicians' services), yielding budgetary savings of $196 billion over 10 years (excluding interactions -- namely, the effects of those changes on payments to Medicare Advantage plans and collections of Part B premiums);

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• The provision that would result in the largest increase in Medicare spending would change payment rates for physicians' services to replace the 21 percent reduction in payment rates scheduled for January 2010, under the existing “sustainable growth rate” formula, with an inflation-based update. In subsequent years, rates would reflect separate updates for “evaluation and management” services and for all other services. CBO estimates that those changes would cost $228 billion over the 2010- 2019 period (before taking into account interactions). Including those interactions, the net cost of the changes in physicians' payment rates would total $245 billion.

FactCheck.org: House bill provides "increase in spending for doctors." From FactCheck.org:

The nonpartisan Congressional Budget Office has estimated that the House bill would result in “savings” of $219 billion after all increases and decreases are netted out. The House bill would trim projected increases in payments for hospitals, insurance companies, pharmaceutical companies and others, including home health care providers and suppliers of motor-driven wheelchairs. But it also proposes what CBO estimates is a $245 billion increase in spending for doctors, by canceling a scheduled 21 percent cut in physician payments. None of the “savings” or “cuts” (whichever you prefer) come from reducing current or future benefit levels for seniors. [FactCheck.org, 8/18/09]

House bill's Medicare provisions include other benefits for doctors. According to a summary of the bill's key Medicare provisions by the Kaiser Family Foundation, the bill also increases payments for primary care services and for certain services provided to areas receiving less care. The bill also increases the payment rate for psychiatric services and extends payments to doctors for quality reporting of data on the care they provide.

Doctors' groups praise House bill's reimbursement change

AMA endorsed House bill's repeal of the formula used to calculate payment rates for physicians. In a July 16 letter to Ways and Means Committee chairman Charles Rangel (D-NY) endorsing the legislation his committee had helped promulgate, the American Medical Association specifically praised the bill's changes to physician reimbursement. From the letter:

In particular, we are pleased that the bill:

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Recognizes that fundamental Medicare reforms, including repeal of the sustainable growth rate formula, are essential to the success of broader health system reforms[.]

AAFP endorsed House bill's doctor payment reform. According to the American Academy of Family Physicians' website, AAFP, which represents “more than 94,600 family physicians,” has “endorsed the bill's elimination of accumulated Medicare payment cuts called for by the sustainable growth rate, or SGR, formula -- a move that would pave the way for a permanent SGR fix. The bill would provide a new framework for future payment updates that would allow spending on physician services to increase at a rate higher than the gross domestic product and create a higher spending baseline target for evaluation and management and preventive services.” [AAFP.org, 7/22/09]

*The headline and text of this item have been changed for clarity.