Good News for Doctors and Children!

March 19, 2015


Congress is poised to do something remarkable. Republicans and Democrats in the House and Senate are ready to enact legislation putting an end to an 18-year odyssey that alienated millions of physicians and created a continual environment of uncertainty for both practitioners and a vulnerable patient population. At the same time, they plan to extend a popular children’s health insurance program.

Some quick history: In 1997, Congress adopted a new formula to determine how Medicare would pay doctors. The “Sustainable Growth Rate (SGR)” tied annual increases in Medicare payments to the rise in the nation’s gross domestic product (GDP). At first, when the U.S. economy was booming, the formula netted doctors a windfall of billions in higher payments. As the economy slowed, however, the SGR formula would have resulted in deep cuts to Medicare fees for physicians. The doctor lobby, understandably, complained and, since 2003, Congress has enacted legislation blocking the cuts 17 times. But the reliance on what became known as the “doc fix” left doctors in a semi-permanent state of ambiguity and rising irritation. As a result, some doctors dropped out of Medicare while others may have retired early.

So what will a post-SGR Medicare program mean for physicians? In the near term, it removes the threat of ridiculously deep cuts. The focus will now shift to tying what Medicare pays physicians to the quality of the work they perform. Right now only a small part of fees are tied to performance, but Health and Human Services Secretary Sylvia Burwell has announced an ambitious plan to increase that to 30 percent in 2016 and 50 percent by 2018. The physician lobby has been fairly quiet about this value-based purchasing approach as long as the amount tied to performance was small. With the prospect of a much more robust program ahead, that may change. The new legislation combines a web of physician pay for performance programs into one “value-based performance program” with a greater focus on care coordination, quality improvement and wellness/prevention.

More Good News

While lawmakers were voting on bipartisan healthcare legislation, Congress tacked on an extension of the Children’s Health Insurance Program, which provides free or low-cost coverage to eligible kids from low-income families who don’t qualify for Medicaid. The cost of the program is split between states and the federal government. But federal funding for CHIP was due to expire Sept. 30, and that would have left governors holding the bag. With Republicans holding 31 governorships, the pressure was on for Congress to act. Since it was created by bipartisan legislation in 1997, CHIP has helped reduce the number of uninsured children by more than half.

Members of both houses will study the bill’s language over the weekend and prepare to vote next week. President Obama has signaled he’s prepared to sign the bill into law as long as it stays on the current path. But all this good work could go for naught if Congress returns to its recent squabbling mode and the votes for this sensible legislation evaporate.