SGR Update
February 1, 2012
Congressional Update
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After the failure of last year’s “super” committee, a new bipartisan committee, The House-Senate Conference Committee, was formed as part of the bill passed before Christmas extending payroll tax cuts and postponing Medicare reimbursement cuts for two months. The new committee is tasked with agreeing on a year-long payroll tax cut extension, an unemployment benefit extension and a Medicare “doc-fix.”
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The committee met on January 24th and both parties agreed that these extensions are necessary and important for the economy. However, there were differences of opinion of whether to seek a permanent or temporary fix to the SGR rate and how to pay for any measures they may take. Most House Republicans called for a final compromise to extend the current rates for two years, plus small annual increases, partly paid for through $44.6 billion in healthcare cuts, including $8 billion from a prevention fund created by the healthcare reform law and $13.4 billion in that law’s health insurance exchange premium subsidies. Most Democrats called for total replacement of the SGR, which they would fund through tax increases on the wealthy and by claiming savings from the end of the Iraq War.Â
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The committee’s next meeting is scheduled for February 1st.
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Physician Organizations
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On January 23, 2012, 110 state medical associations and specialty societies signed a letter sent to Dave Camp, Chairman of the House Ways and Means Committee, requesting Congress to use money that had been projected to be spent on the wars in Iraq and Afghanistan to pay for a permanent alternative to the SGR formula. Dave Camp is also a member of the House-Senate Conference Committee.
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The letter stated that “using the Overseas Contingency Operations (OCO) baseline as an offset for the accumulated SGR bad debt amounts to “cleaning the books,” by eliminating one flawed budget gimmick with another and allowing for a more accurate accounting of future government expenditures without increasing the federal deficit. It also provides an opportunity to immediately repeal the SGR and to establish a pathway toward a truly sustainable physician payment system that focuses on improving quality and value for our nation’s Medicare beneficiaries.”
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The letter also rejected the 2-year extension of the current SGR rates proposed by House Republicans stating that would merely increase the cost of repealing the SGR to $346 billion and lead to a threatened 36% Medicare pay cut two years from now.
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State of the Union Address
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On January 24, 2012, President Obama gave his State of the Union address. Neither his healthcare law nor the SGR reduction was mentioned. In 2010, the President spoke about the new law in depth and in 2011; he stated he was open to making changes to the law, but not repealing it.  The Hill newspaper observed: “Although Democrats insist that Obama will be able to campaign on the healthcare law, it was almost entirely absent from a speech that helped establish the themes and frames his re-election campaign.”
