Short-Term Fix to SGR Gives Reprieve From Medicare Cuts

June 29, 2010—President Barack Obama has signed into law a temporary fix to the sustainable growth rate (SGR) for physician reimbursements through the Centers for Medicare & Medicaid Services (CMS), which provides a 2.2% across-the-board physician payment increase for the period between June 1 and November 30, 2010. This forestalls the 21.3% SGR-mandated reduction that was scheduled to take effect on June 1.

The Society for Cardiovascular Angiography and Interventions (SCAI) has been an advocate to prevent the large cut. SCAI President Larry S. Dean, MD, commented, “The new law represents progress, but it will again take legislative intercession to avert the 23.5% reduction now slated to begin December 1, 2010.”

SCAI noted that even as Congress was putting a patch on the SGR's impact until December, CMS was releasing the Medicare Physician Fee Schedule proposed rule for 2011, including an additional 6.1% fee cut due to the SGR.

According to SCAI, the conversion factor illustrates the impact of SGR changes: the current conversion factor is $36.87. Without another fix, or better yet, a permanent solution, it will fall to $28.47 on December 1, 2010, and $26.66 on January 1, 2011. Unrelated to the SGR, the relative value units (RVUs) for most cardiology procedures continue to be detrimentally affected from the 4-year phase in of the PPIS (Physician Practice Information Survey) data, which generally reduces practice expense values for cardiology procedures. Despite this, SCAI noted that there is some good news in that malpractice and practice expense RVUs for most invasive and interventional procedures are rising for technical reasons.

The proposed rule for next year also continues to erode reimbursement rates for advanced diagnostic testing. The equipment utilization rate for “expensive diagnostic equipment” (eg, computed tomography, magnetic resonance, positron emission tomography) will now be stabilized at 75% by law. In the proposed rule, CMS discusses the elimination of consultation codes in 2010 and claims that this reduction in payment was offset by increases elsewhere.

According to SCAI, data gathered by the American Medical Association disputes CMS's claim, and SCAI will join with the AMA in fighting for a return of consultation codes. SCAI's complete statement regarding these changes and its advocacy activities is available on the society's Web site.

On June 24, 2010, the White House released a statement by President Obama:

“I'm pleased that Congress has acted to ensure the security of our seniors' healthcare. A 21% pay cut to physicians' payments would have forced some doctors to stop seeing Medicare patients—an outcome we can all agree is unacceptable.

“We should also agree, as I've said in the past, that kicking these cuts down the road just isn't an adequate solution to the problem. The current system of recurring cuts and temporary fixes was passed into law more than 10 years ago. It's untenable.

“I believe we need to permanently reform the Medicare formula in a way that attacks our fiscal problems without punishing our hard-working doctors or endangering the benefits on which so many of our seniors rely. I look forward to working with Congress to achieve that goal, and I'm gratified that in the meantime they've taken the provisional step of blocking this pay cut.”

According to the Congressional Record, Representative John D. Dingell (D, Michigan) is the author of legislation that would provide a permanent fix to the current SGR formula, H.R. 3961, the Medicare Physician Payment Reform Act. Last November, the House passed H.R. 3961, which would replace the current SGR formula with a new formula that:

• Removes items such as drugs and laboratory services not paid directly to practitioners from spending targets;
• Allows spending on most services to grow at the rate of gross domestic product (GDP) plus one percentage point per year (compared to GDP without any adjustment today);
• Allows spending on primary and preventive care services to grow at GDP plus two percentage points per year; and
• Encourages coordinated, innovative care by allowing Accountable Care Organizations to be responsible for their own growth paths, irrespective of reductions or increases that apply elsewhere in the system.

The Congressional Record reported that just before Congress voted to approve the temporary fix, Representative Dingell stated on the House floor, “We must pass this bill so we ensure our seniors and military service members and their families will have access to the same doctors they have today. While this bill is of utmost importance, I want to remind my colleagues that our work is not complete. We need a permanent repeal of the flawed SGR formula. For the sake of our seniors, military families and our doctors, we cannot keep kicking this can down the road. I will continue to work toward a permanent fix.”