| To all AOS members:
After meeting with the congressional leaders these appear
to be potential solutions or at least this is what is being
discussed in committee. They clearly told Dale and I all ideas
are on the table not just the ones listed below.
Option 1: freeze physician payment rates at their 2009
levels through 2019, essentially disregarding the SGR
mechanism for those years. Returning to the SGR mechanism
after a 10-year freeze?starting in 2020?would require payment
rates to be reduced by about 5 percent each year for well over
a decade thereafter. Cost: $100B/5 years and $318B /10.
Option 2: fully replace the SGR with annual updates based
on changes in the prices of inputs that are used to provide
physicians’ services, minus a productivity adjustment (as
measured by the MEI). Instead of declining by 21% in 2010 and
5% annually for at least several years thereafter, payment
rates would rise by about 2% annually. Those updates wouldn’t
be subject to further adjustments, and excess spending, as
defined by the SGR, wouldn’t be recouped through subsequent
reductions in payment rates. Cost: $130B/5 and $439B/10
Option 3: expands on option 2 by including a hold-harmless
provision for premiums. Under this option, Medicare’s Part B
premiums would not be adjusted to reflect changes in spending
that resulted from changes in physicians’ payment rates
following the repeal of the SGR formula. Because that hold
harmless provision would uncouple premiums from program costs,
this option would add cost to Option 2. Cost: $164B/5 and
$556B/10
I think that the bottom line is that congress
is trying to grapple with digging us out of the SGR hole we're
in (which clearly is an expensive proposition), while at the
same time making other systemic changes in the way Medicare
pays for care so that there is more focus on primary care,
coordinated care across settings, and better quality and
value, rather than sticking with the current system of
reimbursing more money for more volume regardless of outcomes
and quality. Getting there may cause some growing pains, many
stakeholders who have come to the table on health care reform
agree that we cannot deal with the access issues (coverage for
all Americans) without making fundamental changes to our
delivery system. Congress wants to be careful to do that in a
way that makes sense and doesn't have any unintended harmful
side-effects, and that is why it is so critical that we hear
from everyone throughout this process. Even after major health
reform legislation is passed (fingers crossed!), they will
probably still have to go back in and make adjustments over
time to ensure it is doing what it is intended to do, which is
to improve access, lower the rate of cost growth, and improve
quality in our health care system.
This a critical time in health care. Please pay attention
to these issues. Contact your congressional leaders and inform
them about your concerns.
The communications committee is working hard to implement
an easy way to send communications to congress. I will let you
know as soon as I can about this.
Sincerely,
Jim McKenzie, BOC member for
Arkansas | 
