SGR relief: Let us give thanks, for now

In my last post ("The 2011 Medicare physician fee schedule is here," Nov. 5, 2010), I noted that the fee schedule conversion factor would drop from its current $36.8729 to $25.5217 in January, unless Congress and the President intervened. Thankfully, the U.S. Senate began the intervention process yesterday.

Specifically, yesterday evening, the Senate approved a one-month extension of the current conversion factor. Unfortunately, they did so after the House had recessed for the Thanksgiving holidays, so the House cannot act on the measure until legislators return. However, the House Majority Leader's Office said: "Tonight, the Senate passed a one month extension of the current Medicare physician payment rates. It is my intention to schedule this bill for consideration when the House reconvenes on Nov. 29, so we can send it to the President's desk prior to the Nov. 30 expiration date of current SGR relief."

Thus, it appears the fee schedule conversion factor will not drop before the end of the year. Beyond that, who knows? The cost of a 12-month extension that will include some other Medicare provisions is roughly $19 billion. Where that money might be found in the federal budget is unknown, and Senate Democratic leaders have indicated that none of it should come from repealing portions of the health reform legislation. Even if (and this is a big IF) there are sufficient funds for a 12-month extension, the next issue is the legislative vehicle to make that happen. Should Congress use the Continuing Resolution (which is likely to be only two to three months, but will certainly pass to keep the government operating) or the tax bill (which is likely to be an extension for a year or two of the current tax structure, but which will be the most politically volatile bill)? Absent sufficient funds for a 12-month extension, the question will be how long should the extension be (i.e., how long an extension can be funded)? Ultimately, this may be mostly a political question about whether it is better to force a showdown on health reform sooner or later. 

In the meantime, as you prepare to enjoy your turkey (or other holiday meal of choice) next week, say a little word of thanks for the folks in Washington who have spared the Medicare physician fee schedule for another month. And if you're so inclined, say a little prayer that they will find the money (and the fortitude) to implement a longer-term fix before the end of the year.