Stakeholders Say They’re Preparing For Another Short-Term SGR Patch

With the deadline for fixing Medicare’s physician payment formula just over four weeks away and no solution on how to pay for it on the horizon, stakeholders say they are preparing for yet another short-term patch.

Lobbyists interviewed by Bloomberg BNA were quick to note that although no official policy has been put forward, their respective discussions with the House Energy and Commerce and Ways and Means committees have primarily been focused on a six-month patch, in the hope that it could serve as a bridge to a permanent repeal of Medicare’s sustainable growth rate.

Lawmakers recognize the need to permanently repeal the SGR by the March 31 deadline, one physician lobbyist said, but there’s no question the clock is ticking. Stakeholders and lawmakers are still publicly pushing for a permanent repeal, but the six-month patch is viewed as a contingency plan, the lobbyist said. A short-term patch “is not that big of a concern provided [lawmakers] do a short-term fix to allow room on the calendar for more negotiations,” and a permanent repeal can be agreed to by the fall, the lobbyist said.

Given the high cost of a permanent repeal of the SGR, the bill would need to be debated through “regular order” in the Senate, and there’s just not enough time left to do that, the physician source told Bloomberg BNA. “Those in the [negotiation] room are trying to decide what a short-term patch looks like,” the lobbyist said.

Congress has passed 17 different patches to the SGR. If the current patch expires March 31, Medicare payments to doctors would be reduced by 21 percent. The current patch, the Protecting Access to Medicare Act of 2014, was signed into law in April 2014 (63 HCDR, 4/2/14).

Shawn Martin, vice president of practice advancement and advocacy at the American Academy of Family Physicians (AAFP), said there’s still time for lawmakers to agree on a way to pass a permanent fix, but he admitted he’ll be worried if lawmakers leave town March 6 for recess without a clear path to SGR repeal.

“I don’t necessarily disagree” that six months is an option, Martin told Bloomberg BNA, but there’s still “plenty of runway to get [a permanent fix] done. We’ve been hearing six months is the time frame, but just because that’s the consensus short-term [deal] doesn’t mean it’s decided. It’s just in case we don’t do full repeal.”

Policy Agreement
There was bipartisan, bicameral support for a permanent fix in 2014, with the proposed SGR Repeal and Medicare Provider Payment Modernization Act (H.R. 4015, S. 2000), but the process bogged down because lawmakers haven’t been able to agree on how to pay for it, and despite passing in the House, the bill didn’t advance in the Senate. There is still bipartisan agreement that the SGR needs to be repealed, but partisan disagreements over paying for it mean a full repeal continues to face long odds.

More recently, House committee leaders Paul D. Ryan (R-Wis.) and Fred Upton (R-Mich.) have said they are supportive of the policies that were in the bipartisan, bicameral bill—which stakeholders say is a good start. Ryan is chairman of the House Ways and Means Committee, and Upton is in charge of the Energy and Commerce Committee.

Ryan told reporters Feb. 13 that he sees no need to “reinvent the wheel” in terms of the previous policies. The existing bill “is a solution I agree with,” he said.

But aside from general agreement on the policy from the 2014 House bill, there have been no new confirmed proposals on offsets for the bill. Republicans have said they want structural changes to Medicare, and Democrats have said if offsets are needed, war funds should be used.

Although lawmakers may agree on the policies from the 2014 bill, the cost of those policies is rising. The Congressional Budget Office Feb. 2 said the legislation to replace the SGR would cost $174.5 billion from 2015 to 2025 (24 HCDR, 2/5/15). That’s a nearly $30 billion jump from the $144 billion 10-year estimate that the CBO made in November 2014 (222 HCDR, 11/18/14).

The CBO found the price of a short-term patch has actually decreased, but physician groups say that doesn’t matter.
Robert Wah, president of the American Medical Association, told Bloomberg BNA Feb. 19 that any money spent on a patch is money wasted.

“Money spent on a patch doesn’t advance us,” Wah said. Spending money on a patch just perpetuates the problem, he said.
Wah said he thinks lawmakers are close to introducing a bill for the permanent repeal. “Nothing focuses the mind like a deadline,” Wah said. “Everyone knows a patch is a possibility, but we’re not talking about that.”

Other ‘Cliffs.’
A six-month patch would conceivably line up with other policy “cliffs” that expire about the same time, including the debt ceiling. And a six-month patch could be paid for by smaller, more “innocuous” cuts, such as an extension of the sequester and rebasing Medicaid disproportionate share hospital payments, a stakeholder lobbyist said.

“Six months seems to make the most sense,” the lobbyist said but noted nothing is definitive until a bill has been signed. The lobbyist said during meetings with stakeholders, congressional staff members haven’t asked for specific concessions on ways to pay for a fix.

“The ability to solve this in the short term is more favorable,” the lobbyist told Bloomberg BNA. “At the end of the day, we know the [House Republican] Doctors Caucus wants a permanent fix. A longer patch delays their ability to get to a permanent fix.”

Lackluster Support?
According to the AAFP’s Martin, two scenarios with a temporary patch could dictate the future of SGR negotiations. One option is that lawmakers “just kind of give up on a permanent approach and go to a patch.”

The other option, which holds more hope for a permanent fix down the road, is if lawmakers have “good discussions,” and appear close to an agreement, but just can’t hammer out the details in time.

“The point of entry in how they get to a short-term fix is important,” Martin said. “If they just give up, that’s different” than putting in an honest effort, he said.

Tom Barber, chair of the advocacy council of the American Academy of Orthopedic Surgeons, said the truest sign of lawmakers “giving up” would be if Republicans started talking about paying for a permanent fix with cuts to the Affordable Care Act.

“If I get wind of that, I’d know all discussions are off the table and [it’s] back to partisan politics,” Barber said.

Barber said a permanent fix “could happen in one day, but I don’t get the sense that anybody [in Congress] feels like it has to be done. People are not talking to each other,” he said, which is “frustrating.”

See the original article on the Bloomberg BNA website.