Medicare, Malpractice Top 2005 Health Agenda : Scrapping the sustainable growth rate would be a first step toward fair payment for Medicare physicians.


Joyce Frieden, Jennifer Silverman, and Mary Ellen Schneider contributed to this report.

While medical liability and health care reform remain the top issues for many physicians this year, more urgently needed is a fix to Medicare's flawed payment formula, which threatens cuts of up to 5% in 2006 and cumulative cuts of 30% through 2012.

“It's certainly one of our top priorities for the coming legislative year,” Paul Speidell, government affairs representative for the Medical Group Management Association (MGMA), told this newspaper. Health information technology and other capital investments “are all thrown into question for the physician practice community when you're looking at cuts that major.”

The issue should generate widespread interest, as “every member of Congress has physicians and Medicare beneficiaries in their district,” Mr. Speidell said. All of the physician groups who spoke with this newspaper detailed grassroots and other efforts to get Congress to avert the cuts.

“[The Medicare physician fee schedule] is a likely subject for our committees, and it's possible we'll do hearings” on the issue this year, but no specific agenda has been discussed, Jon Tripp, deputy communications director with the Energy and Commerce Committee, said in an interview.

An ideal scenario would be to scrap the sustainable growth rate (SGR), a component in the physician pay formula that determines each year's update, and to “look toward a vision of paying for performance and rewarding quality,” a Senate aide told CARDIOLOGY NEWS.

That approach comes with a high price tag: The Congressional Budget Office estimates it would cost $95 billion to replace the SGR. Exploring that option “really all depends on what the budget outlook is for this year,” the aide said.

No matter what the cost, the fix needs to be done, Robert Doherty, senior vice president for governmental affairs and public policy with the American College of Physicians, said in an interview. “The cost of fixing this may be high, but the reason it's high is because the hole is so deep—and we did not dig that hole. All we're asking is to fill in that hole so we're breaking even.”

The budget situation is clearly the biggest obstacle, Mr. Doherty said. “If the deficit was not bad as it is, it wouldn't be that difficult.”

While no one can predict whether Congress will pursue a permanent fix or a temporary reprieve as they've done in the past, physicians would gain more credibility if Congress didn't focus solely on fixing the SGR, Mr. Doherty said. “We need to engage in other reforms to the physician payments system to make it more functional for the physician, payer, and patient,” he said.

Malpractice reform is on the top of President Bush's health care agenda and will likely take precedence over the public health safety net and other health care reforms in 2005. Several physician groups and the administration have long advocated a $250,000 cap on noneconomic damages as part of a reform package.

The hurdle ahead is getting the Senate to approve such a bill, Matt Salo, director of the health and human services committee with the National Governors Association, told this newspaper. “Ultimately, you need 60 votes in the Senate to get a bill through. While the Republican margin is a little larger after the elections, it's not 60,” Mr. Salo said.

Passage of the bill is possible, provided that all 55 Republicans in the Senate vote for it, Mr. Doherty said. “We'd also need to win over five Democrats to override a filibuster.” Achieving liability reform “would be a real test of the president's political capital.”

But physicians will have to decide which is more important, a Medicare payment increase or medical liability reform, a Republican House staff member said at a meeting sponsored by the American Bar Association. “They've got two competing interests,” he said. And while some physician groups may pursue liability reform on the assumption that Congress is probably going to pass the payment increase anyway, that isn't necessarily the case, the aide told this newspaper.

Physicians are also holding their breath on the expected transition from the International Classification of Diseases, 9th Revision (ICD-9)—the current diagnosis and inpatient procedure classification system—to the 10th revision (ICD-10).

An upgrade had been recommended on the premise that the ICD-9 was too antiquated to address the need for accurate health care billing in today's technology-driven environment. But physician groups remain concerned that ICD-10 has the potential to drive up costs and add new hassles to physician practice.

The Department of Health and Human Services may issue a proposed rule in 2005, although it's questionable that regulators are looking for more feedback at this point, Robert M. Tennant, MGMA's senior policy advisor for health informatics, said in an interview. Physicians would prefer a staggered implementation date, Mr. Tennant said. In addition, “we would like health plans to be compliant first, so physician practices could have time to get their systems upgraded and complete their testing and staff training,” he said. The goal is to make sure the transition is cost effective and causes as little disruption to the industry as possible, he said.