Road to SGR ‘Doc Fix’ Has Many Possible Paths

February 7, 2012

Perhaps Congress hopes some sort of solution to the SGR will unexpectedly land on its doorstep. And perhaps it finally has - in the form of unspent war funds.

The good news is it’s likely you won’t experience a 27 percent cut to Medicare reimbursements at the end of this month. The bad news is you could be facing such a drastic cut again next year, and the year after that, and the year after that.

No shocker here. Each year Medicare cuts to reimbursements loom overhead due to the flawed Sustainable Growth Rate Formula (SGR). And, just when you begin fearing that Congress will fail to step up and provide a solution to the problem, they do - kind of.

In a series of “short-term” fixes, Congress has simply rolled over the SGR problem year after year.

This year, that rollover is estimated to cost $9 billion, according to a recent Congressional Budget Office estimate. And if Congress continues rolling the SGR over for the next ten years, the office estimates it will cost a whopping $316 billion.

Perhaps Congress hopes some sort of solution to the SGR will unexpectedly land on its doorstep. And perhaps it finally has - in the form of unspent war funds.

After years of fighting in Afghanistan and Iraq, more and more U.S. troops are returning home. That means less money spent supporting and saving for the war. And for some supporters of this new proposed SGR fix, that means money that could be reallocated to pay for the SGR repeal.

It might seem like a far-fetched solution, and some have dubbed it just that.

During a December 2011 floor speech, Sen. Jeff Sessions (R, Ala.) called the approach a fallacy that should not be considered acceptable by his colleagues. "Everybody knows the war costs are going to be coming down, and we've been planning for that,” he said, according to American Medical News. “You can't assume that money will be available to spend willy-nilly.”

Still, the war funds proposal has a long list of supporters who think it could provide a very real solution. That list includes the AMA and 108 other state and specialty medical societies.

“We are writing to encourage the conferees to take advantage of the very real opportunity to repeal Medicare’s sustainable growth rate (SGR) formula,” the organizations wrote in a recent letter to the congressional committee charged with fixing the SGR. “This long stated goal of Congress is now within reach and we urge you to take advantage of it immediately by using excess baseline projections for Overseas Contingency Operations (OCO) to help offset necessary Medicare baseline changes.”

That congressional committee met for the second time last week. Members are expected to - at a minimum - endorse a short-term fix that could be one or two years, according to MedPage Today. What’s more promising is that it appears that the committee agrees that the SGR should be repealed entirely.

"Repeal SGR? My goodness, wouldn't that be a wonderful thing,” one doctor on the panel, Rep. Tom Price (R-Ga.), said during the meeting, according to MedPage Today.

Still, agreement that a long-term fix is needed doesn’t necessarily mean it will happen.
 
Numerous other proposals have been floated before Congress over the past several months. Though many have hailed them as promising, the SGR remains in place.