‘Tis the Season for Speculation About Medicare Sustainable Growth Rate Reform

Ken Perez
Ken Perez

Guest post by Ken Perez.

This is the time of year for speculation regarding which teams will play in the various college football bowl games, but also, unfortunately, whether Congress will finally pass a permanent repeal of the unpopular Medicare Sustainable Growth Rate, which once again threatens to impose a sharp decrease to the physician fee schedule, reportedly 24.4 percent on Jan. 1, 2014.

Just as most every college football team had a sense of optimism when the season began, throughout the summer and fall it seemed like politicians on both sides of the aisle were, to switch metaphors, singing from the same hymnal, railing against the Medicare Sustainable Growth Rate and arguing for a permanent “doc fix.” And, of course, physician groups provided supportive background vocals.

But here’s the problem: A permanent solution will be costly, very costly. According to the latest estimate by the Congressional Budget Office (from May), freezing (i.e., holding flat) all Medicare physician rates for 10 years would cost $139 billion, and proposals that are more generous to physicians would obviously cost more. The Medicare Sustainable Growth Rate remains the elephant in the room of deficit reduction. As for temporary patches, I’ve seen ballpark estimates of $18 billion for a one-year doc fix and $36 billion for a two-year freezing of rates, but both of those solutions would simply “kick the can down the road” yet again.

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