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A Quarter Trillion Dollars – from where?

That’s what it is going to cost to ‘fix’ Medicare’s physician reimbursement problem. A bill introduced into the Senate, and now scheduled for a vote within days would eliminate the Medicare Sustainable Growth Rate (SGR) program (which determines, or is supposed to determine, what docs get paid by the Feds for procedures) while adding another quarter trillion dollars to the program’s deficit.
The Medicare SGR formula/process was set up six years ago to establish an annual budget for Medicare’s physician expenses. Each year, if the total amount spent on physician care by Medicare exceeded a cap, the reimbursement rate per procedure for hte following year would be adjusted downward.
And for the last six years, reimbursement – according to SGR – should have been cut, but each year it was actually raised, albeit marginally. The result is a deficit that is now almost 250 billion dollars, a deficit that we’\re carrying on our books, and, by the way, is not addressed in the Senate Finance Committee’s reform bill. In order to pass, the bill, S 1776, will have to get at least 60 Senators to agree to waive a budget point of order because the measure is not offset in the budget – that is, there isn’t a cut of a quarter trillion in spending elsewhere in the budget, so the bill, which goes by the feel-good title of Medicare Physician Fairness Act of 2009 (MPFA) will add a quarter-trillion bucks to the deficit.
Physicians are, not surprisingly, all in favor of the bill – even if there are no details on what the ‘new reimbursement’ methodology or levels will be. Certainly not in the bill itself, which takes less than a minute to read. If you’re looking for what replaces SGR, and how Medicare will control costs, don’t look in the bill – it isn’t there. It looks like the docs think anything is better than the SGR; at least that’s what their thinking appears to be today.
But what about the cost? Where are we going to come up with a quarter trillion dollars, while adding another eight hundred billion or so for the big health reform bill? Does the MPFA have some magic bullet, a money tree, a golden goose provision?

Sources on Capitol Hill tell me this isn’t just a Democratic measure, but one that will likely garner perhaps a half-dozen Republicans voting ‘aye’. Both Harry Reid (D NV) and Minority leader McConnell have agreed the Senate will proceed to vote on S. 1776 next week.
Well, what can you expect from a body that voted in favor of Medicare Part D, and as a result added $8 trillion to the Medicare unfunded liability? This is a measly quarter-trillion, less than 3% of the Part D boondoggle.
Jeezus H Flippin Christmas. This is nuts.

4 thoughts on “A Quarter Trillion Dollars – from where?”

  1. I cannot believe this was written by the same Joe Paduda who was so in favor of health care reform, regardless of the costs! Now, suddenly, your concerned about spending???
    Joe, that train left the station several months back!

  2. And I can believe this is the same Dorrence who has an amazing ability to selectively recall memories that support his own rather unique world view.

  3. So you would allow the cuts to go through Joe? Should we send all of the Grandparents to your address when their doctor drops them or would you like to write them a check so they can get into a retainer practice?
    They are simply trying to buy votes, because if it goes through the AARP and seniors in their district will make sure they are unemployed.

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Joe Paduda is the principal of Health Strategy Associates



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