The latest MedPAC report urges repeal of the SGR -- of course. What will Congress do with that?
In its March 2012 report, MedPAC recommended a series of payment adjustments, including a 1% increase in payment rates for hospital inpatient and outpatient services. (They found the Medicare profit margins for hospitals improved between 2008 and 2010 -- but remain negative at −4.5%.)
They also recommended Congress "reduce payment rates for evaluation and management office visits provided in hospital outpatient departments so that total payment rates for these visits are the same whether the service is provided in an outpatient department or a physician office."
Payments to ASCs, MedPAC said, should be upgraded by 0.5%, and outpatient dialysis services for ESRD should go up 1%.
But, citing high margins, they said payments to SNFs should be rebased, and get an "initial reduction of 4% and subsequent reductions over an appropriate transition until Medicare’s payments are better aligned with providers’ costs... our recommendation would help counter the financial incentive SNFs have to rehospitalize beneficiaries." (You can imagine how SNF advocates feel about that.)
Payments to home health agencies, too, should be rebased, said MedPAC, which policy "would lower payments beginning in 2013." Hospices, however, would get a 0.5% bump.
MedPAC's main point was that the hated SGR method of calculating physicians' payments should be scrapped.
Its plan, as previous announced, is to cut specialists' pay by 5.9% for three years, followed by seven years of payment freeze, while PCPs get a ten-year freeze. During this "10-year path of statutory fee-schedule updates," Congress would have to gather data, identify overpaid services and cost sharing and reduction opportunities, and work out some other way of compensating doctors that is less likely to lead to the huge cost overruns Medicare has been suffering.
So what will actually happen? Justified cynicism suggests that nothing will. Big dogs like AARP are preparing to fight any major changes to Medicare tooth and nail.
But the watershed events of the next eight months -- the Supreme Court health care reform judgment and the November elections -- actually make for a more hopeful situation than usual.
However those events shake out, whoever winds up on top will find it both logistically and politically necessary to make some bold moves to consolidate their gains. If Republicans are victorious, they'll have to scramble to create a more popular alternative to the ACA than the widely despised alternatives they've so far offered; if Democrats are successful, they'll have to find a way to rein in the massive costs of the ACA or risk losing all their gains in a fresh financial collapse.
So we'll see action by year's end. What kind of action, we can't yet say. And as to whether that action will be positive or disastrous, let's not even think about that just yet.