Decreasing Medicare reimbursement has made it increasingly difficult for Medicare patients to find a doctor who will see
them. For many people, this can be a major barrier to attaining care, especially when transportation becomes an issue. One of the reasons for this problem is that the payment formula is flawed. Since
1992, Medicare has reimbursed physicians on a fee-for-service basis. In 1997,
Congress implemented the SustainableGrowth Rate (SGR)
to control Medicare spending and make sure that growth in physician
reimbursement does not exceed the growth in GDP. This has not worked because
the cost of medical care has increased faster than GDP; health careexpenses currently make up 18% of GDP, while in 1998 it was 13.4%. Congress has had to
continually override the SGR because of concerns
that reduced payments to physicians would limit patients’ access to care.
Each year, the Centers for Medicare and
Medicaid Services (CMS) sends a report to Congress about the previous year’s costs
as well as a conversion factor that will change the payments for physician
services for the next year in order to match the target SGR. For example, if 2013
expenditures exceeded the target (which they did), then the conversion factor
will decrease payments for 2014. If the expenditures were less than expected (guess
how many times that has happened), the opposite would happen. These changes
take place on March 1 every year. As it stands, without congressional action
Medicare physician services face a 23.7% cut on April 1 of this year.
Furthermore, if the trend continues, it is projected that average 2021 Medicare
payments will be just half of what they were in 2001 (adjusted for inflation).
There
is currently joint legislation to repeal the SGR (H.R. 4015/S. 2000).
The SGR Repeal and Medicare Provider Payment Modernization Act will allow for a
more stable Medicare physician payment policy that better serves Medicare
patients. The current system with SGR is flawed and unsustainable. Tell
your members of Congress to vote as soon as possible in support of repealing
the SGR formula and reforming the Medicare physician payment system.