SGR Update
Yesterday, the House of Representatives held a series of votes regarding H.R. 3630, legislation that would extend an expiring payroll tax reduction and unemployment insurance benefits, as well as stop a 27.4 percent Medicare physician payment cut that is scheduled to take effect on January 1. The net result was to leave the status of 2012 payment rates in limbo.

Votes on H.R. 3690. As originally passed by the House on December 13 by a vote of 234-193, the legislation would have provided Medicare physician payment updates of 1 percent a year for two years, followed by a return to the current negative trend line produced by the sustainable growth rate (SGR) formula. But, due to disagreements over financial offsets and other policy issues unrelated to the SGR, the legislation could not attract a sufficient number of votes to pass the Senate. On December 17, the Senate voted 89-10 to pass an amended version of the bill that would extend all the expiring policies, including current Medicare physician payment rates, for two months. The rationale for the short-term extension was to avoid disruptions on January 1 and provide time for further negotiations on financing longer-term extensions.

House action on December 20. Following the Senate’s action, a significant number of House Republicans expressed strong opposition to the two-month extension, and several relevant votes were scheduled. Most important of these, the House approved a resolution by a vote of 229-193 to disagree with the Senate and appoint members to a House-Senate conference committee, which would be charged with working out differences between the two versions of the bill. Prior to the House votes, the Senate leadership announced that the Senate would not reconvene over the holidays to engage in further negotiations and votes. In addition, members of the House are departing this evening for the holidays, after being informed that they could be called back to Washington on short notice. At this time, it does not appear likely that the outstanding issues will be resolved before January 1.

2012 Medicare Physician Payments
On December 19, the Centers for Medicare and Medicaid Services announced that it would hold claims for 2012 physician services for 10 business days, until January 17, to avoid processing payments at the lower rate. After that date claims will be processed on a first in, first paid basis at the reduced rates until the situation is resolved. The House is currently scheduled to return to Washington on January 17, while the Senate is scheduled to return on January 23. However, there are reports that the House, at least, may move up the date of its return to January 3.

LSMS Views
The LSMS has and will continue to voice its opposition to any short-term patches to the SGR formula. Eliminating the SGR and replacing it with a realistic formula that utilizes accurate physician practice costs along with realistic inflationary trends to determine reasonable physician reimbursement is absolutely essential.

•    In August 2010, an LSMS membership survey indicated the 38% would either reduce or stop seeing Medicare

      patients if reimbursements are reduced. This and future cuts will shatter access to care for Medicare patients.
•    Already, 44 percent of Louisiana’s practicing physicians are over 50, an age at which surveys have shown

      many physicians consider reducing their patient care activities.
•    Over 800,000 Medicare and Tricare patients and covered beneficiaries in Louisiana will be impacted if the SGR

      payment cut is implemented.
•    Fifteen (15) percent of Louisiana's population rely on Medicare for their health care.