Mar 20 2015
On April 1 Medicare physicians across America are scheduled to receive a 21 percent pay cut. This is no April Fool’s Day hoax, but an automatic action triggered by Medicare’s sustainable growth rate (SGR) formula, which mandates significant cuts to physicians’ Medicare reimbursements each year that Medicare payments increase more than economic growth.
Allowing the SGR’s reductions to take effect is an untenable outcome. If Congress were to subject physicians to a pay cut every time they see a Medicare patient it would quickly become unaffordable for America’s doctors to continue seeing Medicare patients, which would leave millions of seniors essentially locked out of our health care system.
No one wants to begin the month of April like this.
Congress’s instinctive reaction to the looming threat of the SGR is to ask: “How can we fund the gap in Medicare physician payments?” But this misses the point. The real problem is not the SGR formula, but the fiscally unsustainable structure of the Medicare program.
If Congress wants to respond to the April 1 deadline responsibly, without jeopardizing seniors’ access to their doctors or saddling the American taxpayer with more debt, our guiding question must be: “How do we fix Medicare so that it doesn’t cost so much in the first place?”
The only real solution to the annual SGR panic – and therefore the only solution that conservatives in Congress should accept – is a plan that includes structural reforms to Medicare that move the program away from its centrally planned, price control model toward a market-based, premium support model.