Close your eyes and imagine a world without a sustainable growth rate (SGR) mechanism that promises to slash your Medicare payments. There'd be no more worries of a 21.5% Medicare payment cut in 2010; no fears of a doomsday 25% cut in 2011.
A world without the SGR would be pretty nice, huh? Perhaps just pure fantasy? Well, a SGR-free world may soon become a reality.
Sen. Debbie Stabenow (D-Mich.) recently introduced S. 1776 to liberate physicians from the oppressive tyranny of the SGR. The bill is called the Medicare Physician Fairness Act of 2009 and it already has four co-sponsors. The bill kills the SGR, but it doesn't provide for any positive updates to the formula calculating Medicare payments. Meaning, payments wouldn't go up or down -- there would just be a conversion factor of 0%, according to the bill.
Despite the lack of positive updates, the AMA supports Stabenow's bill because it doesn't continue the status quo. If you don't believe me, watch this video:
The Congressional Budget Office (CBO) has said such a plan would cost $10 billion in 2010 and $318 billion from 2010 to 2019 (because of growth in patient enrollment and spending, see "Option 59" of the CBO report). I've yet to see a way to pay for the bill.
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Roller coaster history of annual physician fee updates
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Year
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Projected Physician Pay Update
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Actual Pay Update
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Date Congress Approved Higher Fee Update
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1999
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NA
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-5.3%
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No activity
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2000
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+5.3%
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+5.4%
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No activity
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2001
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+1.8%
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+4.5%
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No activity
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2002
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-0.3%
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-5.4%
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Physicians lobbied Congress to reduce the update to -0.9% but it didn't act.
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2003
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-4.4%
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+1.6%
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Feb. 13, 2003; effective March 1
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2004
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-4.5%
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+1.5%
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Nov. 25, 2003
for 2004 & 2005
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2005
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-3.3%
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+1.5%
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2006
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-4.5%
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0.0%
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Feb. 1, 2006
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2007
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-5.0%
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0.0%
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Dec. 9, 2006
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2008
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-10.1%
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+0.5%
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Dec. 19, 2007
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7/1/ 2008
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-10.6%
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+0.5%
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Jul 15, 2008
(veto override)
for 2nd half of 2008
& 2009
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2009
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-15.4%
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1.1%
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- NA = not applicable; CMS wasn't required to estimate fee updates until passage of the Balanced Budget Act in 1999.
- 2003 pay update wasn't effective until 3/1/2003
- 2006 pay update was effective retroactively to 1/1//2006.
- 2008 pay update initially effective only until 6/30/08.
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