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Life Health > Health Insurance > Medicare Planning

Medicare doc pay fix moves forward

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House and Senate leaders from both parties say they have come up with an agreement on a way to replace the much-postponed Medicare “sustainable growth rate” (SGR) physician payment adjustment system. 

The group that worked out the Medicare doc pay fix agreement includes House Ways and Means Chairman Dave Camp, R-Mich.; Rep. Sander Levin, D-Mich., the highest ranking Democrat on the Ways and Means Committee; Senate Finance Committee Chairman Max Baucus, D-Mont.; and Sen. Orrin Hatch, R-Utah, the highest ranking Republican on the Senate Finance Committee.

Rep. Michael Burgess, R-Texas, a medical doctor who serves on the House Energy & Commerce Committee, will introduce the measure in the form of H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act bill.

The House and the Senate had been considering two somewhat different doc pay fix bills, H.R. 2810 and S. 1871.

The SGR system — part of the Balanced Budget Act of 1997 — was supposed to hold down Medicare cost increases by limiting increases in Medicare physician reimbursement rates to the growth rate for the U.S. gross domestic product (GDP).

Health care costs kept growing faster than GDP, and Congress always postponed the effective date of the SGR system.

H.R. 4015 would repeal the SGR system and let Medicare doctors’ reimbursement rates increase 0.5 percent a year for five years. A committee would then have to come up with a long-term solution.

The bill also would replace many different Medicare physician performance incentive programs with one value-based incentive program, and the program would encourage Medicare physicians to participate in care coordination arrangements.

In related news, America’s Health Insurance Plans (AHIP) released a Medicare Advantage program funding analysis by actuaries at Oliver Wyman. 

The actuaries found that cutting federal Medicare Advantage support 6 percent in 2015 could lead to premium increases and benefits reductions with a total value of $35 to $75 per enrollee per month.

Officials found several years ago that the government was spending substantially more on enrollees in private Medicare Advantage plans than on enrollees in the traditional Medicare program.

Since then, the government has narrowed the gap by cutting Medicare Advantage funding sharply, and Obama administration officials and other policymakers have talked about imposing more cuts next year.

The cuts that took effect this year have produced premium increases and benefits reductions with a value of $30 to $70 per month for each of the 15 million 2014 Medicare Advantage plan enrollees, AHIP says.

CMS is set to release preliminary 2015 Medicare Advantage support rates Feb. 21.

AHIP President Karen Ignagni said in a statement that Medicare officials should maintain current Medicare Advantage funding levels.

“Seniors cannot afford another round of rate cuts to their Medicare Advantage coverage,” Ignagni said.

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