Congress Approves One-month Medicare Payment Patch

Congress has passed a one-month Medicare physician payment extension that will temporarily postpone a 23 percent reduction in the payment rate and give lawmakers more time to work on a longer-term payment patch. President Obama signed the measure on Nov. 29.

The Senate passed the one-month payment extension on Nov. 18, and the House followed suit on Nov. 29 after returning from its Thanksgiving recess. The patch extends the current Medicare payment rate until Dec. 30, thereby postponing the 23 percent reduction called for by the sustainable growth rate, or SGR, formula that was scheduled to take effect Dec. 1. Without further congressional intervention, however, the payment cut will deepen to 25 percent on Jan. 1.

"This reprieve prevents practice disruption and financial challenge for physicians and instability in Medicare patients' access to care," said AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas in a prepared statement. "But it's only a very brief reprieve. In truth, physicians need at least 12 months to develop and implement stable business plans that assure elderly and disabled patients that care will be available when they need it. Furthermore, the nation needs a longer period to study models that build an efficient, effective physician payment system."

Sen. Max Baucus, D-Mont., chair of the Senate Finance Committee, and Sen. Charles Grassley, R-Iowa, the ranking member of the finance committee, have vowed to pursue a year-long payment fix before the month-long SGR patch expires.

"We have been asking for at least a one-year payment patch so that more work can be done to identify an appropriate revision or replacement of the current payment model or to work on finding offsets to fund a longer-term patch," said Goertz in an interview with AAFP News Now.

Goertz also said, "A 12-month extension will give the physician community and Congress time to work together in establishing a three- to five-year SGR patch" that, it is hoped, will include a positive differential payment for primary care physicians.

During this longer period, HHS and the physician community will have the opportunity to research and collect data on the best ways to transform health care delivery so that primary care is once again recognized as being fundamental to patients' health, said Goertz.

He urged AAFP members to continue to engage their congressional leaders to "stress the importance of a longer-term fix in order to stabilize Medicare services for over 47 million Americans." He also advised members to access the AAFP's Medicare Action Toolkit, a resource to help family physicians and their patients generate support for fixing the flawed payment system.