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CBO grades Medicare doc fix bills

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Congress may have to come up with at least $121 billion to kill a perennially postponed Medicare payment system change.

Analysts at the Congressional Budget Office (CBO) have posted estimates of implementing two Medicare reimbursement fix bills, H.R. 2810 and S. 1871, on the CBO website.

Lawmakers created the Medicare Sustainable Growth Rate (SGR) physician payment system in the Balanced Budget Act of 1997.

BBA drafters wanted to hold increases in Medicare physician reimbursement rates to the rate of increase in U.S. gross domestic product (GDP).

But health care costs have almost always grown faster than GDP, and Congress has never mustered the will to let the SGR shift take effect.

H.R. 2810 would increase Medicare payment rates by 0.5 percent in 2015, and another 0.5 percent in 2016, then hold payments steady through 2023. The system also would use a new “value-based” system to pay extra cash to high-performance physicians and take cash away from low-performance physicians, and it also would create an “alternative payment model” to encourage physicians to use other types of approaches to accept care-related financial risk.

S. 1871 would hold base Medicare physician payment rates level from now through 2023, and it also would create a “value-based” and “alternative payment model” payment systems, in an effort to pay more money to physicians who provide efficient, high-quality care.

Both bills would start by offering physicians “value-based” pay adjustments as large as 4 percent, and, from 2017 through 2022, the physicians who get value-based pay would get lump-sum annual payments equal to 5 percent of their Medicare payments in the prior year.

Implementing House bill would costs about $120 billion from 2014 through 2023, and implementing the Senate bill would cost about $150 billion, the CBO analysts estimate. 

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