Medicare SGR Faces A Bitter End

Dear Medical Executives, President’s Forum, Trustees and Interested Physicians,

The 2011 Congressional legislative session comes to a bitter end today.  Members of Congress will go home for the holidays in a rare standoff that will not result in a last-minute agreement to stop the Medicare SGR 27.4% fee-for-service program payment cut,  or extend the payroll tax cut and unemployment benefits.  

CMA is absolutely outraged that Congress will adjourn and let this devastating nearly 30% payment cut take effect.   For a decade, CMA and organized medicine has been calling upon Congress to eliminate the Medicare SGR.  All year, Members of Congress made commitments to CMA physicians and seniors  that they would stop the cuts and adopt a long-term solution to the failed Medicare SGR physician payment formula.  In the height of irresponsibility, Congress will go home for the holidays and deal a terrible blow to physician practices and their patients.  Most physicians will not be able to sustain such a cut and remain in the Medicare program.  Others could be forced to close their doors.  Seniors in California are already experiencing difficulty finding physicians.  This will have a devastating impact on access to physicians for California’s 5 million seniors and nearly 1 million military families.      

Late last week, when negotiations failed between the House and the Senate, a bipartisan group of Republican and Democratic Senators crafted a short term two-month extension on the Medicare SGR, payroll tax cut and unemployment issues to avoid the devastating cuts that will occur next week.  The Senate passed the measure with overwhelming support 89-11.  However, under the direction of Speaker Boehner, the House  leadership rejected the 2 month extension and are holding out for a longer term deal.  The standoff  will remain unresolved until Congress returns in January 2012. 

CMA has been advocating for legislation that  eliminates the SGR and adopts a longer-term path to an alternative payment system.  Within the last few days, to avoid the inevitable, CMA supported the 2-month stop-gap on the Medicare SGR to avoid devastating cuts and a retroactive payment restoration.  

Unfortunately, the Medicare SGR was tied to much larger controversial issues in the year-end legislative package.  While no formal statements have been made by either the Senate or House leadership about their intent to return in January to stop the cuts, we expect Congress to return on January 3 rather than January 17 to address these issues.  The House has created a conference committee to bargain over the differing House and Senate bills.    

The Centers for Medicare and Medicaid Services (CMS) announced that they would hold  claims starting January 1 through January 17 to avoid paying physicians at the lower rate and to avoid a retroactive reconciliation of claims in the event Congress acts in early January to stop the cut. 

CMS said they will be forced to process claims at the lower rate starting January 18 if Congress does not stop the cut. 

CMA encourages physicians to review their Medicare participation options in the CMA Medicare Participation On-Call Document available on the CMA website. 

CMA will keep you informed as the debate continues.  We have expressed our anger to our Congressional delegation for failing to keep their obligation to appropriately finance the Medicare program and to protect access to care.

Thank you for your efforts this year to restore the Medicare program.  CMA  will “fight like hell” in 2012 to develop a proactive Medicare payment alternative and to hold Congress accountable for these actions. 

Elizabeth McNeil

Vice President

Federal Government Relations

California Medical Association

415 310 2877