Could GOP majority scuttle SGR reform?

November 13, 2014

Even with the GOP more firmly entrenched on Capitol Hill, a permanent fix of the sustainable growth rate formula is still a possibility, say urologist James Ulchaker, MD, and Brad Stine of the AUA.

Bob GattyWashington-Once again, urologists and other physicians whose practices are heavily reliant upon Medicare payments for patient care will soon face another potential crisis as a 21.2% reduction in the sustainable growth rate (SGR) formula, on which payments are based, is set to take effect March 31.

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In April, President Obama signed legislation averting a 24% cut, after approval by the Republican-controlled House of Representatives and the Democrat-controlled Senate. It was the 17th time Congress had stepped in with a short-term measure to block scheduled physician cuts.

Congress again faces the same challenge, but this time the dynamics are different as Republicans have gained seats in the House and are in firm control in the Senate, where only 16 GOP senators supported last year’s fix and where there were insufficient votes to approve a permanent solution that would have increased Medicare payments by 0.5% annually for the next 5 years. Lawmakers, principally Republicans, could not agree on how to finance the $120 billion price tag of permanently eliminating those cuts.

Optimism on SGR reform in 2015

So now, with the GOP even more firmly entrenched on Capitol Hill, how can a solution be possible?

“I do not think having a Republican-controlled Congress means SGR reform is dead. Even if it isn’t addressed in the lame-duck session, we still have until March 31 to get it done,” said James Ulchaker, MD, chairman of the AUA’s Legislative Affairs Committee.

The AUA and its allies are working Capitol Hill now hoping to convince lawmakers in the post-election “lame duck” to provide a permanent solution to this annual problem. But Dr. Ulchaker and Brad Stine, the AUA’s director of government relations, believe that if that effort fails, there will be an opportunity for success early in 2015.

“Even a temporary fix costs money,” Stine observed. “But folks in Congress are tired of doing the patches. This problem wears on members up there. There is a lot of support for getting this resolved.”

Still, Republicans believe they were sent to Congress to “get spending under control,” and one of the most forceful advocates for reducing Medicare costs, Rep. Paul Ryan (D-WI), is expected to chair the House Ways and Means Committee, which would put him in a position to have enormous influence over what happens with Medicare. In fact, there has been speculation that Ryan may try to tie an SGR solution to broader, more ambitious Medicare reforms.

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“We are working closely with our new lawmakers,” said Dr. Ulchaker, “to reemphasize the importance of this and to volunteer our expertise and services, whenever possible, to try to get across the finish line.” He acknowledged that some “give and take” will be required, including from physicians.

Complicating the entire scenario is the determination by Republicans to either repeal or dismantle, piece by piece, the Affordable Care Act.

An early objective appears to be elimination of the 2.3% tax on medical devices imposed by the ACA, estimated by the Joint Committee on Taxation to cost $29 billion over 10 years. Such a move could make it more difficult for many budget-conscious lawmakers to justify adding more costs to Medicare by fixing the SGR. In addition, one of the early pledges by both House Speaker John Boehner (R-OH) and Senate Majority Leader Mitch McConnell (R-KY) was to cut Medicare spending.

Moreover, when House Republicans in March tried for a 5-year delay in the ACA’s individual mandate to finance permanent SGR reform, the Congressional Budget Office estimated 13 million Americans would end up without health insurance by 2018. The subsidy savings of that move was estimated at $170 billion over a decade, but increased uninsured care would add to costs, mostly to Medicaid.

GOP majority’s effect on IPAB

However, there may be some good news for urologists who are worried about how the Independent Payment Advisory Board (IPAB), established by the ACA, would affect Medicare payment rates in the future. The AUA and other physician groups have lobbied strongly for repeal of the IPAB, which would go into action if Medicare spending reached a certain threshold, and could order Medicare spending cuts-including in reimbursement rates.

Dr. Ulchaker noted that while that threshold has not been reached, thus mitigating some concern about the IPAB, the new Republican majority in the Senate most likely would refuse to confirm board members nominated by President Obama, making it impossible for the Board to act.

“However, we still want to see that repealed,” he said. “That may be one of the piecemeal things that we can get done. There are many Democrats who want to get rid of the IPAB, in addition to Republicans.”

Taking a broad view, Dr. Ulchaker is optimistic about positive changes happening.

“For once, right now everybody has to be accountable,” he said. “Now that the Republicans have gained so many seats, they still have to produce legislation. They can’t just fight among themselves, or in 2 years voters will hold them accountable. Likewise, the president has to be accountable because [outgoing Senate Majority Leader] Harry Reid (D-NV) is not there to block everything… Once people are accountable, sometimes they think that it’s time to get things done.”

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