The American Medical Association's AmedNews electronic newsletter reports that reduced projected Medicare spending for the next decade has lowered the estimated cost of repealing Medicare’s sustainable growth rate formula that helps determine physician pay.
Eliminating the sustainable growth rate (SGR) and freezing Medicare doctor pay rates over 10 years would cost $245 billion, according to new projections from the Congressional Budget Office. Officials previously had estimated that nearly $300 billion would be needed for a pay freeze. But with slower expected growth in program spending, the SGR formula — which decreases doctor pay when predetermined spending limits are exceeded — would not lower doctor rates as much and thus would be less costly to reverse.
The physician association reports that lawmakers said they will work to prevent a scheduled 27 percent SGR reduction to Medicare pay before it takes effect in 2013. Congress also faces other significant year-end fiscal challenges, including expiring tax cuts and automatic reductions of federal defense and nondefense spending.
Determining ways to pay for an SGR repeal is still a major challenge, but now a lower budgetary offset would be needed to cover the cost. Medicare spending in 2012 is expected to be $9 billion less than in 2011 due to the alignment of budgeting calendars, the CBO report states. But future estimates for spending growth also have been reduced, CBO Director Doug Elmendorf said during an Aug. 22 briefing with reporters. For instance, the agency has decreased Medicare cost projections for 2019 by $100 billion during the last three years.
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Physician Reimbursement Physician Fee Schedule CMS