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 MedPAC 'Doc Fix' Proposal Unworkable, AHCA Says

A draft proposal being floated by the head of the Medicare Payment Advisory Commission (MedPAC) to undo the program’s sustainable growth rate (SGR) formula for setting physician reimbursement is not making provider and physician groups happy, with one, the American Health Care Association (AHCA), calling the massive overhaul “unworkable.”

Jeff Myers, AHCA senior vice president of policy and government relations, said AHCA agrees with MedPAC that SGR needs to be fixed, but not with the steps contained in the draft.

“MedPAC’s suggestion completely ignores the fact that senior care is paid for by Medicare and Medicaid. Gutting Medicare puts patient access at risk because the cost of care is paid for by both programs, and it doesn’t look at the problem holistically,” says Myers.

Long term care providers have for years noted sharp reimbursement deficits from the Medicaid program. An Eljay report for AHCA last year said the average shortfall in Medicaid nursing home reimbursement was projected to be $17.33 per Medicaid patient day in 2010.

At issue now is a draft by MedPAC staff written with the approval of commission Chairman Glenn Hackbarth that would amount to a 10-year freeze of Medicare pay for primary care physicians. Specialists would see a 5.9 percent pay cut for three years, followed by seven years of no change.

The plan was presented to commission members last week and will be voted on at MedPAC’s next public meeting Oct. 6-7. MedPAC does not have direct authority to implement policy, but instead makes recommendations to Congress.

Besides AHCA comments, other providers and critics worry the MedPAC plan would drive more doctors out of Medicare.

Myers said in addition to the other problems AHCA has with the draft is that a long-term “complete” fix is not possible without “realistically asking for beneficiary input.”

MedPAC is seeking a permanent solution to avert a 29.5 percent reduction in Medicare rates on Jan. 1. This reduction is mandated by the SGR formula.

The reduction is part of federal budget projections. If MedPAC’s proposal is approved by Congress, and stays the same through the October commission vote, it would cost the government $300 billion to repeal the SGR and freeze physician pay at 2011 levels.

A $100 billion chunk of the $300 billion cost is taken care of by the reduced specialist reimbursement. Another $235 billion in savings could come from a 32 percent cut to Medicare Part D, 21 percent from post–acute care facilities, 11 percent to hospitals, 9 percent to laboratories, 6 percent to durable medical equipment suppliers, 5 percent to Medicare Advantage, 2 percent to other providers, and an additional 14 percent from Medicare benefits to seniors.

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