Congress is within striking distance of enacting fiscally-prudent legislation that would help transform Medicare into a revitalized 21st century program that’s fair, sustainable and supports access to high quality care and better health outcomes for patients and the nation for generations to come. The prospects for enacting patient-centric, fiscally-responsible policy are looking more promising than ever before, but the clock is ticking on Congress to take action and reform Medicare.
Bipartisan, bicameral congressional support has brought us to this unique moment, and now we need to get this legislation across the finish line.
The Congressional Budget Office’s latest cost estimate of $117 billion to eliminate the fatally-flawed sustainable growth rate formula is at an all-time low and represents just half of what the cost was a year ago. Congress must act swiftly to reform our Medicare system before this fiscally-advantageous opportunity slips away.
Each year for the past decade, the SGR has perpetuated a vicious cycle that has threatened dramatic payment cuts to physicians and endangered access to care for seniors. Over the same time, the SGR has also forced a series of extremely expensive short-term congressional patches to be passed to keep the underfunded system running — 16 patches in all costing American taxpayers $154 billion.
Since 2003, Congress has invested more in futile legislative patches than the most recent CBO estimated cost of $117 billion to simply repeal the SGR altogether. The cost of each short-term patch has grown significantly over time. In the past three years alone, the cost of stopping the looming cut grew from $14.9 billion in 2011 to $25.2 billion in 2013.
These very costly short-term legislative patches have only served to grow the problem by increasing an SGR proposed payment cut from 5 percent in 2007 to 24 percent for 2014. At the same time, there is an enormous and widening gap between what Medicare pays and the actual cost of caring for seniors. Since 2001, the cost of care has increased by 25 percent while physician payments have gone up less than 4 percent. Today, average Medicare practice expense payments cover only 54 percent of physicians’ direct costs. Unless Congress enacts SGR repeal legislation by March 31, the physicians who care for Medicare patients will face a 24 percent across-the-board Medicare payment cut beginning April 1.
Thankfully, momentum has been building and it looks as though the stars have finally aligned to create a unique opportunity for Congress to enact substantive and sorely-needed reforms. Pending legislation includes important financial and administrative provisions that represent improvements over current law governing quality reporting and pay-for-performance programs.
We must not let the challenge of offsetting the cost of ending the failed SGR policy become an excuse for maintaining the status quo. Instead, Congress should make this critical investment in Medicare and look to the many ground-breaking projects already under way around the country that hold great promise for guiding the development of new and improved Medicare delivery and physician payment systems. These projects include patient-centered medical homes, accountable care organizations, an array of approaches to bundle payments and shared savings arrangements, as well as new initiatives designed by regional health improvement collaboratives.
The American Medical Association is committed to doing its part to help shape a system that is fair, sustainable and that supports better health outcomes for patients and the nation.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.