Report: SGR reform leads to deficit exposure
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“A permanent doctor fix…will impose costly years of reckoning,” the Emeryville, Calif.-based provider said, adding that SGR reform merits entry into the calculus of deficit reduction and will be factored into the appraisal of the nation’s creditworthiness by credit rating agencies.
Putting off reform of the SGR even for one year would result in implementation of significant decreases to Medicare physician fees in 2012, which would lead to reductions in physician participation in Medicare and patients' access to care, wrote Ken Perez, director of MedeAnalytics' healthcare policy team and the company's senior vice president of marketing.
The report, "The Sustainable Growth Rate: The Elephant in the Room of Deficit Reduction," examined the history of the SGR and congressional overrides of the provision. The report also detailed the potential cumulative effect of temporary fixes on the broader context of the Budget Control Act of 2011 (BCA).
Additionally, the report reviewed various efforts to reform the SGR, outlining four options for addressing the problem, and discussing three possible solutions:
- Do nothing. Under this scenario, a 29.5 percent reduction in Medicare physician fees would take effect on Jan. 1, 2012, in addition to reductions called for under the BCA.
- Carry out another temporary fix. This scenario increases the eventual cost of a permanent fix, highlighting Congress' lack of resolve to find a permanent solution—a fact that would be noted by the credit rating agencies, possibly contributing to future downgrades to the U.S. credit rating.
- Reform or replace. This scenario—assuming congressional passes of one of the most likely SGR options—would increase Medicare spending on physician services by approximately $300 billion from 2012 through 2021, and would necessitate offsetting cuts in other parts of Medicare and Medicaid, and possibly in other, non-healthcare sectors.