The AADA calls on Congress to provide a stable payment system for dermatologists to ensure Medicare beneficiaries continue to have access to quality dermatologic care. On Sept. 12, the AADA joined the broader physician community in sending a letter to both the House and Senate urging Congress to stop the looming cuts to Medicare physician payments resulting from the flawed SGR formula and the upcoming sequestration cut to Medicare payments.
Physicians face a 27 percent payment cut beginning Jan. 1, 2013, unless Congress provides a legislative delay. Additionally, the Budget Control Act of 2011 calls for another 2 percent Medicare payment cut for physicians through the sequestration process. Together, these cuts would decrease Medicare physician payments by nearly 30 percent, severely jeopardizing patients’ access to quality dermatologic care.
Federal budget office releases report detailing sequestration cuts
The Budget Control Act Agreement adopted in early 2011 created a Joint Select Committee on Deficit Reduction (supercommittee) charged with identifying up to $1.5 trillion in spending cuts by Nov. 23. The agreement stated that if the supercommittee could not reach consensus, an automatic 2 percent, across-the-board budget cut would be instituted in January 2013, through what is called the sequestration process. As a result of the supercommittee failing to risk an agreement, funding for Medicare physician payment, medical research, and Graduate Medical Education (GME) faces a 2 percent funding cut in early 2013 unless Congress acts to reverse the looming cuts.
The Office of Management and Budget (OMB) released a report detailing the sequestration cuts triggered by Congress's failure to enact a plan to reduce the deficit by $1.2 trillion. The report provides an explanation of which programs would be cut, the extent of the cuts, and which programs would be exempt from cuts.
According to the report, roughly $109 billion in cuts would be implemented every year from fiscal year 2013 to fiscal year 2021. Specifically, Medicare's 2 percent cut will come out of provider payments rather than enrollee benefits. Additionally, medical research funding will be negatively affected by the looming sequestration cuts, with the Centers for Disease Control and Prevention facing about $464 million in cuts to discretionary programs and the National Institutes of Health facing about $2.5 billion in cuts. The AADA is urging Congress to enact legislation to stop the physician payment cuts and restore medical research funding.
AADA responds to Ways and Means inquiry about SGR
In an effort to study possible solutions to reform the flawed SGR, several members of the Ways and Means Committee recently sent a letter to the physician community requesting feedback on several questions related to practice, payment, and quality. The AADA responded to committee members on May 25 with a letter that expressed concern about the instability the SGR causes for dermatology in regard to practice management, payment models, and health information technology investment, as well as other issues.
Senate Finance Committee holds physician payment roundtable
On May 10, the Senate Finance Committee held a roundtable discussion with four former administrators of the Centers for Medicare and Medicaid Services (CMS) and the Health Care Financing Administration, including Gail Wilensky, Bruce Vladeck, Tom Scully, and Mark McClellan, MD, on Medicare physician payment reform.
The four former administrators agreed on several points, including the need to adopt bundled payments for physician services. Several of the panel members cautioned against tying the payments to hospital services. They also urged Congress to reform the resource-based relative value scale (RBRVS).
There was conversation among the administrators and senators regarding the Relative Value System Update Committee (RUC) and its potential outlook for the future, given the “politicizing,” as described by some of the adminstrators, that occurs. It was noted, however, that CMS has full authority to reject a RUC recommendation.
Reps. Schwartz and Heck introduce SGR repeal legislation
On May 9, Reps. Allyson Schwartz and Joe Heck introduced HR 5707, the Medicare Physician Payment Innovation Act of 2012, to repeal the sustainable growth rate (SGR) and lay out a transition period for physicians to adopt new payment and delivery models.
This legislation pays for the SGR repeal using war funding that is available due to the drawdown of troops in Iraq and Afghanistan. It phases out traditional fee-for-service (FFS) over five years while providing a temporary but an ideally more stable physician payment system.
Beginning in 2018, physicians would transition into these new payment models, whereas those physicians remaining in traditional FFS would be penalized on a progressive basis. Additionally, this legislation includes limited safe harbor language to protect a physician who does not fit into any of the new delivery models.
Congress passes 10-month Medicare payment fix
On Feb. 16, a bipartisan House and Senate conference committee released its legislative proposal to delay for 10 months the scheduled 27 percent cut to Medicare physician payments that was set to begin March 1.
This proposal, which also includes both payroll tax and unemployment benefit extensions, follows a two-month push by the American Academy of Dermatology Association (AADA) and the physician community to urge Congress to permanently repeal the broken sustainable growth rate (SGR) formula.
This stopgap measure, which Congress passed on Feb. 17, provides only temporary relief from the impending cuts now scheduled for Dec. 31. By continuing to postpone permanent action, the cost of a long-term solution continues to increase exponentially, with the cost of repeal doubling to $600 billion in five years. Read a statement from AADA Immediate Past President President Ronald L. Moy, MD, about this measure.
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