Medicare fee schedule fix may be less likely with new House leadership

December 1, 2010

With a new wave of Republicans who have vowed to slash federal spending now controlling the House of Representatives and wielding more clout in the Senate, chances that the Medicare fee schedule crisis will be permanently resolved any time soon appear to have significantly dimmed.

Key Points

Washington - With a new wave of Republicans who have vowed to slash federal spending now controlling the House of Representatives and wielding more clout in the Senate, chances that the Medicare fee schedule crisis will be permanently resolved any time soon appear to have significantly dimmed.

That outlook raises fresh concerns among dermatologists and others in the medical profession.

"Physicians cannot continue to operate like this," says Jack Resneck, M.D., chairman of the American Academy of Dermatology Association (AADA) Council on Government Affairs, Health Policy and Practice. "It's not good for physicians, and it's not good for patients."

"Both political parties want to fix it, but you have to realize that we just had an election that was focused on stopping spending, so I think the odds of getting this passed have worsened and we are facing an uphill battle," Dr. Resneck says.

"While the academy will continue to do everything possible to get this resolved, people need to understand that it is going to be a steep uphill climb," he says.

Two fixes needed

The initial challenge for the lame-duck Congress that opened for business on Nov. 15 was to pass another temporary reprieve for the total 24.9 percent cut that has been ordered by the Centers for Medicare and Medicaid Services (CMS), with the first 23 percent reduction slated to take effect Dec. 1 and the remainder a month later.

But beyond that, the challenge is to find a way to solve the long-term fee schedule reform problem that now carries that $330 billion price tag in an atmosphere where dozens of new lawmakers have ridden into Washington with "Cut the deficit" emblazoned on their saddles.

In announcing the cut, required under the sustainable growth rate (SGR) formula in current law, CMS noted that Congress has provided temporary relief from such reductions every year since 2003, and "A long-term solution is critical."

"Broad physician participation in Medicare is essential to ensuring that beneficiaries continue to have access to care, and physician engagement is critical to our efforts to strengthen the quality of care," said CMS Administrator Donald Berwick, M.D. "Medicare needs to be a strong, dependable partner with physicians - and that means the SGR must be fixed. The administration supports permanently reforming the Medicare payment formula."

The American Medical Association, in a Sept. 29 letter to then House Speaker Nancy Pelosi (D-Calif.) and Republican Leader John Boehner (R-Ohio) that was co-signed by AADA, pleaded with the House leaders to find a permanent solution and stop the practice of leaving physicians dangling in the wind every couple of months when a temporary "fix" to scheduled fee cuts expires.

"Physicians simply cannot absorb cuts of this magnitude," the letter declared. "Congress must break the cycle of forestalling a crisis in patient access to physician care for only a few months at a time and take action on legislation to provide stability and predictability for the program at least through 2011."

The AMA pointed out that last year's uncertainty forced many practices to seek loans to meet payroll, lay off staff, or cancel capital improvements and investments in electronic health records and other technology. Then, when payments resumed, many physicians experienced long delays in receiving their retroactive adjustments.