Medicare doctors have been threatened with pay cuts each year over the past decade. The condition remains the same this year. The American Medical Association (AMA) president recently drew attention to the fact that physician payments under Medicare will drop by roughly 24% at the end of this month when scheduled cuts under the sustainable growth rate (SGR) payment formula kick in.
This scheduled cut is determined by targets set under the Sustainable Growth Rate (SGR) formula that was created as part of a 1997 deficit reduction law designed to rein in federal health spending by linking physician payment to an economic growth target.
Congress passes the legislation known as ‘Doc Fix’ regularly to avoid doctors taking the financial burden and keep the reimbursement levels around the same.
The Senate Finance Committee has passed a bill that would repeal the SGR and replace it with a system of rewarding physicians based on the quality of care they provide to Medicare patients rather than the number of services performed.
In addition to repealing and replacing the SGR formula, the senate bill would:
- Freeze the base rate pay of any doctor who participates in Medicare through 2019
- Shift the healthcare system from a fee-for-service model to one that reimburses providers based on the quality of care
- Provide a 0.5% annual raise through 2018 to any doctor who participates in Medicare
- Provide funding — known as Medicare extenders — for expiring programs that are considered highly essential to rural hospitals, such as ambulance add-on payments, outpatient therapy caps and low-volume provider adjustments.
This week Republican leaders in the House finally brought to a vote the legislation known as “Doc Fix” they’d unveiled in February. However, the vote was found meaningless and the bill is doomed to die because it’s tied to a delay of Obamacare’s individual mandate for five years through 2019.
The Congressional Budget Office (CBO) estimates that the senate bill to repeal SGR would cost $180B over 10 years. Though Congress efforts to repeal the Medicare sustainable growth rate (SGR) exist, there are chances that the SGR cuts may hit physicians as scheduled on April 1. This 24% pay cut will be too hard for physicians as they will have to cut corners due to this and may refuse to accept Medicare patients. They are likely to lose a considerable number of their patients as both Medicare and Medicaid cover more than 100 million Americans.
As medical outsourcing is proving economical, more physicians might gravitate towards outside companies to save money. Outsourcing to medical billing firms abroad is likely to increase. Without doing this, the doctors may be forced to cut corners and spend less time with each patient to accommodate more patients, which will in turn drastically affect the quality of care.