Congress is considering another 12-month doc fix, averting a 24 percent cut in Medicare physician payments scheduled for April 1. While the SGR patch contains several serious reforms that would reduce future health care costs, it contains one big accounting gimmick that accounts for about one-fifth of the bill's savings.
(Updated to incorporate new information from the Congressional Budget Office's score of the doc fix bill)
Proposals to "pay for" (or not pay for) a repeal of the Sustainable Growth Rate (SGR) formula have come out this week, and the verdict has been mostly not good.
To bolster their case against offsetting the high cost of SGR reform, many have claimed that the Medicare Sustainable Growth Rate (SGR) is “budget fakery” and represents “savings that aren’t going to be realized.” Yet while it’s true most SGR cuts have not gone into effect as scheduled, that doesn’t mean the SGR hasn’t helped to control health care costs.
Note: This blog has been updated from its original posting to include the CBO score of the Senate Republican proposal.
Earlier today, we wrote that the the House Republican SGR bill would add to long-term deficits by using a timing gimmick to pay for permanent costs with temporary savings. It turns out, a Democratic alternative introduce by Rep. John Tierney (D-MA) would replace this gimmick with another – the war spending gimmick.
While the relevant congressional committees recently reached agreement on a bipartisan plan to replace the Sustainable Growth Rate (SGR) formula with a payment structure to better incentivize high-quality, higher-value care, the question of how to pay for that reform remains unresolved.