CBO’s Estimated Cost Of Freezing Medicare Physician Pay Falls Slightly

The Congressional Budget Office lowered by $5 billion its 10-year estimate of the cost of freezing Medicare payments to physicians, which is good news for those pushing to replace the Sustainable Growth Rate formula. However, physicians are lobbying to replace SGR without paying for it, and some Republicans reportedly are warming to the idea.

When CBO last scored the cost of freezing Medicare physician pay, the estimate had crept up after more than a year of falling. Some physician lobbyists worried that meant the cost would continue to steadily rise, but the new score allays those fears, physician lobbyists say. CBO on Friday estimated the 10-year cost of freezing pay at just under $119 billion. The cost of a pay freeze is often cited as the cost of a doc-fix, but Congress wants to increase physician pay somewhat. CBO estimates that giving physicians annual 0.5 percent pay increases would cost $140.2 billion over 10 years. The bipartisan policy agreement that providers want Congress to pass this year also includes other so-called Medicare extenders that further increase the cost of the package.

If physician lobbyists convince Republicans to replace SGR without paying for it, the cost doesn’t matter. CQ Roll Callreported Monday (Nov. 17) that Sen. Orrin Hatch (R-UT), who is expected to take the Senate Finance Committee gavel next year, and three House GOP Doctors Caucus members are open to replacing SGR with either partial or no offsets. Those House Republicans whom CQ Roll Call quoted are Phil Roe (TN), Joe Heck (NV) and Charles Boustany (LA).

Nevertheless, physician lobbyists say passing SGR legislation during lame duck session is a long-shot, and some don’t believe that Republican leadership will go along with the idea. Also, the relationship between Republicans and Democrats is going downhill fast, and that could hurt the prospects of passing SGR legislation, said Julius Hobson, a senior policy adviser with Polsinelli.

Click here to see the original article on the Inside Health Policy website.