Special Report - June 2008
Tex Med . 2008;104(6):26-31.
By Ken Ortolon
WASHINGTON, D.C. - Medicare is standing on a precipice, and a 10.6-percent cut in Medicare physician payments scheduled for next month may be the only nudge needed to send it crashing over the edge. That's the message more than two dozen Texas Medical Association physician leaders, medical students, and TMA Alliance members took to Capitol Hill in April.
The Texas delegation joined nearly 1,000 representatives of organized medicine from across the country at the American Medical Association's National Advocacy Conference in Washington, D.C., April 1-2. While the conference discussed a wide range of health issues, fixing Medicare's flawed physician payment system certainly ranked at the top of the agenda.
"Our primary goal is to make sure Congress understands the seriousness of the Sustainable Growth Rate [SGR] problem in the Medicare payment system," said then-TMA President William W. Hinchey, MD, of San Antonio. "We need both a short-term fix to stave off the cuts scheduled to take effect in July and a long-term solution to end this problem once and for all."
Dr. Hinchey's well-publicized " Texas Medicare Manifesto " calls for Congress to enact a rational Medicare physician payment system that automatically keeps up with the cost of running a practice and is backed by a stable funding source.
While Texas physicians were encouraged at the increasing awareness of Medicare payment issues among lawmakers, it appears the high price tag and the political environment of a presidential election year may make it difficult to solve the SGR problem this year.
Taking a page from TMA's First Tuesdays at the Capitol playbook, hundreds of physicians donned white coats for a rally on the Capitol grounds, then scattered among House and Senate office buildings to carry their personal message to lawmakers.
The Texas delegation broke up into three groups and over the two days of the event met with every single member of the Texas congressional delegation or members of their staff, including staff for U.S. Sens. Kay Bailey Hutchison and John Cornyn.
Susan Rudd Bailey, MD, of Fort Worth, chair of the Texas delegation to the AMA House of Delegates, was impressed with the increasing awareness of Medicare physician payment problems she found among the Texans in Congress.
"Every year, people are more aware of it," she said. "A couple of years ago when we were up here talking about this, we had to explain SGR to them. We don't have to explain SGR anymore."
Sheldon Gross, MD, of San Antonio, a member of the AMA Political Action Committee (AMPAC) Board of Directors, says Texas lawmakers are not only well-versed in Medicare payment issues, but they also largely support medicine's position.
"They all seem to be very well informed on the importance of replacing SGR with something the physicians can live on," he said. "We really didn't have to convince anybody. The congressmen and all their legislative aides were very much in our court, but I think it's a matter of timing and finding the right vehicle to get a bill passed."
Currently, AMA backs legislation by U.S. Sen. Debbie Stabenow (D-Mich.) that would provide an 18-month fix. Senator Stabenow's bill would stop the 10.6-percent cut from taking effect on July 1 and raise payments to physicians by 1.8 percent in 2009. The Congressional Budget Office estimates that bill would cost $40 billion over the next five years.
Senate Finance Committee Chair Max Baucus (D-Mont.) also is working on a bill that likely would provide some type of short-term fix. Senator Baucus may take his bill directly to the Senate floor rather than marking it up in committee first. That approach may save time, but would leave physicians guessing about what the payment rates would be until much closer to the July 1 deadline.
The Long-Term View
While TMA supports Senator Stabenow's 18-month fix, Texas physicians also are pushing hard for a long-term solution.
"That's the goal we have to reach," said Dr. Hinchey. "Whether we get it done before June or whether we try to get action before the fall, or whether it gets punted to the next Congress, we don't know. But if we don't start the debate, if we don't start getting momentum going, we'll never reach it."
Click here for more information on TMA's proposals to fix Medicare.
During meetings with lawmakers, Dr. Hinchey repeatedly pointed out that failure to address physician payment issues is negatively affecting access to care for seniors in Texas. A recent TMA survey found that over the past two years the number of Texas physicians willing to see new Medicare patients has declined from 68 percent to 58 percent. That, he says, is making it difficult for some patients to find a physician, particularly certain specialists. The survey results are posted on the TMA Web site at www.texmed/org/manifesto.
"It's going to become an access problem for some patients," Dr. Hinchey told aides to U.S. Rep. Solomon Ortiz (D-Texas). "Until we fix this problem, it's going to become more and more of a cancer."
In addition to Senator Stabenow's short-term fix, TMA leaders back bills by U.S. Rep. Michael Burgess, MD (R-Texas), and Senator Cornyn that would provide the long-term solution that Dr. Hinchey says must eventually occur.
HR 2585, introduced in 2007 by Representative Burgess, eliminates the SGR in 2010 and replaces it with rates based on the Medicare Economic Index. That approach is similar to how payment rates are set for hospitals. Senator Cornyn's bill takes a similar approach.
Speaking at a luncheon attended by physicians from both Texas and Georgia, Representative Burgess said fixing the Medicare physician payment is the No. 1 health care problem facing Congress.
"If we don't correct that, then all the other stuff we want to talk about as far as health care reform or transformation is all under the bridge because we're not going to have the physician workforce we need to implement the changes that we want to see implemented," he said.
At that same luncheon, U.S. Rep. Tom Price, MD (R-Ga.), said Congress needs to "step back, take a deep breath, and give folks an opportunity to figure out what we ought to do next." He is sponsoring legislation similar to Senator Stabenow's that would provide an 18-month, short-term fix to give Congress time to do that.
Punting It Again?
While it is still unclear which vehicle, if any, will prevail in the current Congress, chances of getting a permanent solution this year look slim.
Rich Deem, AMA senior vice president for advocacy, told conference participants that there is "limited opportunity" for real reform this year because of a combination of factors. Those factors include the 60 votes needed to block a filibuster in the Senate, congressional "PAYGO" rules that require Congress to offset any new spending with cuts elsewhere in the budget, the limited time Congress has to act before the July 1 deadline, and the pressures of the presidential race.
Chances are good that many complicated issues, including Medicare physician payment reform, will be deferred until after the November election, Mr. Deem says.
Representative Price says there are rumors that Democratic leaders in the House may just let the 10.6-percent cut take effect. That, he says, may not be a bad idea because it almost certainly would provoke a reaction from physicians that Congress could not ignore.
Still, some physicians don't think Congress will take decisive action until the pressure comes from Medicare patients.
"Unfortunately, Congress will respond only when patients really get engaged," said former TMA President and AMA Trustee Jim Rohack, MD."Clearly those patients who are having difficulty finding a new primary care internist or family physician to take care of them are going to have to light up the phone lines to Congress and demand that they fix this."
Ken Ortolon can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by e-mail at Ken Ortolon .
Medical Students Push Loan Deferment Bill
Medical students from across the country descended on Capitol Hill in late March to urge Congress to reinstate a program that allowed residents to defer payment on their medical school loans for up to three years.
The so-called "20/220 rule" allowed residents to defer loan repayments for three years without accruing interest. The program was repealed in September, however, as part of the College Cost Reduction and Access Act signed into law by President George W. Bush.
Travis Bias, a fourth-year medical student at the University of North Texas Health Science Center College of Osteopathic Medicine who participated in AMA's Medical Student Lobby Day, says repeal of the deferment rule is an unfair financial burden on residents.
"This rule essentially allowed two-thirds of residents to defer their loan payments for at least three years of their residency training," said Mr. Bias, a TMA Medical Student Section delegate to the AMA House of Delegates. "And now that's gone away, and we have a bunch of friends and colleagues training in residency that are expected to now pay over half their pay check to their loan repayment starting their first year of residency."
Residents were eligible for the 20/220 program if their debt burden was greater than 20 percent of their income and their income minus the debt burden was not greater than 220 percent of the federal poverty level.
The Association of American Medical Colleges estimates that 67 percent of residents were eligible for the program.
Mr. Bias says legislation has been filed to restore the program, and most of the Texas representatives he met with seem supportive of those bills.
"Everyone we spoke to seemed pretty sympathetic," he said. "Again, two-thirds of residents in this country are helped out by that deferment pretty significantly, so everyone seemed to think it was unreasonable to expect us to be repaying those loans that early."
Mr. Bias was scheduled to graduate in May and begin his own residency in family medicine at Memorial Herman Southwest in Sugar Land this summer. He was one of 14 Texas medical students who participated in Medical Student Lobby Day. He and several others also participated in the National Advocacy Conference and joined physicians and Texas Medical Association Alliance members in urging Congress to fix the Medicare physician payment system.
Stephanie Howe, a first-year medical student at Baylor College of Medicine, says medical students must get involved in issues such as Medicare payment because those issues will shape the climate that students will practice in once they graduate.
"It's very important to start planning for these things and becoming aware of the kinds of challenges that we're going to face," she said.
Medicare Hospital, Health Plan Payments to Jump
While physicians are staring at a potential 10.6-percent cut in their Medicare fees, hospitals and Medicare Advantage plans will see their payments go up - again.
Under a rule proposed by the U.S. Centers for Medicare & Medicaid Services (CMS) in April, payments under the inpatient prospective payment system to acute-care hospitals would increase an average of 4.1 percent in fiscal 2009. The total increase will be nearly $4 billion.
CMS also announced in April that Medicare Advantage plan payments would increase on average 3.6 percent in 2009.
The proposed increase in hospital payments includes a 3-percent increase to cover inflation, plus additional increases resulting from the final phase-in of CMS's new Medicare Severity Diagnosis-Related Groups (DRGs), which assign weight to DRGs based on hospital costs rather than charges.
The proposed rule also expands the list of quality measures hospitals must report in order to receive the full annual payment update under Medicare and expands the list of hospital-acquired conditions for which Medicare will no longer pay.
Hospitals and other Medicare providers have seen their payments continue to increase over the past several years while physician fees have largely remained flat, thanks to stopgap measures by Congress to avert significant payment cuts under the Medicare Sustainable Growth Rate formula. Hospitals received a $3.4 billion increase for 2008, Medicare Advantage plans got a $4.4 billion increase, and nursing homes got a $701 million increase.
Physician fees went up by 0.5 percent, or $149 million, for the first half of 2008, but they will be cut by 10.6 percent next month unless Congress intervenes.
In his Medicare manifesto, published in February, then-TMA President William W. Hinchey, MD, said Congress should not increases fees for hospitals, Medicare Advantage plans, or other providers until the physician payment system is fixed. (See " The Texas Medicare Manifesto ," February 2008 Texas Medicine , pages 5-6.)
In a letter to U.S. Sens. John Cornyn and Kay Bailey Hutchison and members of the Texas congressional delegation, Dr. Hinchey said it is "blatantly unfair" to continue raising Medicare Advantage payments while physicians are having to make tough decisions limiting the number of Medicare patients they see because of inadequate physician payments.
TMA has no quarrel with Medicare Advantage plans but "we simply have a hard time understanding why CMS is proposing payment increases for Medicare Advantage plans when they already are being paid at 15 to 50 percent above the market rate," Dr. Hinchey wrote. "To boot, physician payments basically have been stagnant for the past seven years; if not for the proactive work of Congress, physician payments would have been reduced by more than 30 percent."
Dr. Hinchey suggested that the increase in Medicare Advantage plan payments should instead be used "to make sure our senior citizens and Texans with disabilities can find a physician when they need one."
He reiterated that message to Texas representatives during visits on Capitol Hill held as part of the AMA's National Advocacy Conference in April.
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