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June 25, 2010
by Tony Barber
Recent News
On Thursday, Congress decided to set aside their differences on the inclusion of jobs and unemployment considerations and to approve another temporary fix to the Sustainable Growth Rate ("SGR") adjustment that would have reduced physician fees paid under the Medicare program by 21.3% effective June 1st.
Instead, providers will receive a 2.2% increase from Medicare. This is the good news. The bad news is that this entire matter will have to again be addressed in November, after the elections and with the political climate in Washington and around the country, it is difficult to project how or if this matter will be more permanently addressed at that time.
Though CMS released Monday that it would order its contractors to begin processing claims at the lower rate, we have seen no evidence that they, in fact, did so. Providers around the country have seen their claims being held since June 1st, but the lower pay rate appears not to have been affected.
This makes the tenth time in 8 years that Congress has delayed the automatic cuts in doctors' Medicare fees that it decreed in 1997 to prevent Medicare spending from outpacing other consumer expenditures. That measure, The Sustainable Growth Formula ("SGR") tied physician payments by Medicare to economic growth by comparing the medical cost index to that of the economy. The faltering economy coupled with unchecked medical costs have created the perfect storm for SGR to collide with the fragile delivery system.
Now it will be up to providers to monitor their payments to assure that they are paid in accordance with what was approved. This includes the management of managed care payors whose payments are tied to Medicare payment rates. Providers often times do not monitor the terms of their agreements and compliance thereto by payors and thus, payors are often allowed to continue reimbursing at the lower rate. On the other hand, managed care payors are much more adept at enforcing reductions that favor them.
Providers are urged to understand their managed care agreements and to establish automated means of compliance to the payment terms thereof. It is highly recommended that consultative support be engaged as necessary given the amount of money that is involved in nearly all circumstances.
Though most in Congress view SGR as a mistake, the financial and political quagmire in Washington has prevented intelligent focus on a long term solution. To correct the problem, SGR would need to be repealed and this would cost about $25 billion annually. The fiscal crisis, which is far greater than any of these numbers, at the Federal level has made it difficult to reverse any legislation that increases the deficit, no matter how ineffective and ill-founded it is.
Providers should take this 10th "shot over the bow" very seriously. There are no sure bets that this pattern of reversal will continue and, in fact, political sentiment is swinging against it given fiscal concerns. It is time to clear SGR from the books and correct it as you would any mistake. Everyone agrees that healthcare costs are excessive and that is particularly true in a poorly performing economy. The answer is true healthcare reform....not legislation loaded with "pork" that has nothing to do with healthcare or the cost thereof. Healthcare reform must address the delivery process....including the methods by which providers are paid. We don't need a single payor system; we need a value system that rewards providers for efficiency, quality and cost effectiveness....instead of a "pay per click" system that drives consumption and duplication.
We have said and evidenced that properly managed urgent care centers are capable of treating up to 35% of 118 million patients presenting to the hospital emergency rooms each year.....at a significantly lower cost. Even so, little has been done by payors or the federal government to build on this or to stimulate a more robust shift in the delivery system. The Urgent Care Association of America has taken on the initiative of better qualifying urgent care centers through published standards and a certification program that credentials them. The American Academy of Urgent Care Medicine has also advocated this and has its own initiative. Even so, payors have generally not sufficiently acknowledged the value of these credentials or the value to the healthcare delivery system by paying urgent care centers in a consistent and fair way. There are many ways to affect positive change in the "delivery system" without inserting yet another payor in the mix....particularly a "single payor". With a thoughtful address to the delivery issues such as the one outlined herein, the fed can move the entire process forward in a meaningful way and drive performance up and cost down.
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