Senators work to overcome 'flawed' SGR formula, despite setbacks

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Sen. Harry Reid, D-Nevada
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Senate Majority Leader Harry Reid, D-Nev., is “determined to continue working” on changing the Medicare payment system and repealing the sustainable growth rate (SGR) formula after failing last week to get enough votes to force an up-or-down vote on S. 1776 (Medicare Physician Fairness Act).

The bill, introduced by Sen. Debbie Stabenow, D-Mich., would have eliminated the 21.5 percent Medicare payment rate reduction for physician services in 2010 and repealed the SGR formula through which Medicare physician payments are determined.

In a procedural vote, only 47 senators--all Democrats--voted in favor of cloture (wherein, the Senate can vote to place a time limit on consideration of a bill or other matter, and thereby overcome a filibuster). The 47 votes were 13 votes short of the 60 needed to force a vote on the bill.

The Medicare physician payment process currently using the SGR was created by Congress in 1997, but because of the way that the payment system works, Congress has been forced to intervene annually to avert steep cuts in physician reimbursement.

“This year marks the eighth year in a row that Congress will be forced to prevent scheduled physician payment cuts under the Medicare program,” said Patrick Leahy, D-Vt., during debate last week on the cloture motion for S. 1776.

Leahy said that "scheduled cuts are based on a flawed formula, which cuts physician payments in the future if physician spending exceeds a target based on the growth of the economy. Because the scheduled cuts are cumulative, next year we could expect to see a 21 percent reduction in physician payments and a cumulative 40 percent cut scheduled by 2016. It is no wonder Congress has consistently acted to prevent these cuts and experts have called for a repeal of this broken formula.”

However, Senate Minority Leader Mitch McConnell, R-Ky., called the bill “deficit expanding,” because it would have, he charged, increased the deficit by $250 billion to $300 billion. All 40 Republicans, along with 12 Democrats, voted against ending cloture.

“Despite today’s outcome, I am determined to continue working to address the current flawed payment system,” said Reid after the vote.“ I remain hopeful we can pass a multi-year fix after health insurance reform.”

The American Medical Association (AMA), the American Association of Retired Persons (AARP), and other physician groups had strongly supported the bill. For example, following the introduction of the bill by Stabenow earlier this month, the American College of Radiology had contacted its members asking them to call their senators asking them to support S. 1776.

Also, in response, the Ameican College of Cardiology (ACC) vocalized its disappointment, and its Presiden,t Fred Bove, MD, issued a letter to its members on how the the college is attempting to fight these cuts.

And, in the aftermath of the Senate vote, J. James Rohack, MD, AMA president, issued a statement saying the association was “deeply disappointed” with the vote.

““There is widespread agreement among Republicans and Democrats that the formula is broken and needs to be repealed,” said Rohack. “Congress created the Medicare physician payment system, and Congress needs to fix this problem once and for all to fulfill its obligation to seniors, baby boomers and military families. Permanent repeal of the Medicare physician payment formula is essential to comprehensive health system reform.”