Despite being billed as a permanent solution to the annual threat of Medicare payment cuts to physicians, a bill repealing the Sustainable Growth Rate formula will not ensure adequate physician payments in the long term, according to actuaries at the Centers for Medicare & Medicaid Services.
In an April 9 report outlining the effect of the Medicare Access and CHIP Reauthorization Act (H.R. 2), the CMS Office of the Actuary said it anticipates “that physician payment rates under H.R. 2 would be lower than scheduled under the current SGR formula by 2048 and would continue to worsen thereafter.
thinkstockphotos.com
“Absent a change in the method or level of update by subsequent legislation, we expect access to Medicare-participating physicians to become a significant issue in the long term under H.R. 2,” the report’s authors noted.
The actuarial report attributes the long-term issues to a number of the bill’s provisions. First, it notes the expiration in 2025 of updates totaling $500 million per year and a 5% annual bonus, which will result in a payment reduction for most physicians.
Second, “this bill specifies the physician payment update amounts for all years in the future, and these amounts do not vary based on underlying economic conditions, nor are they expected to keep pace with the average rate of physician cost increases,” the report warned. That will result in payments that will be inadequate when rates of inflation are higher or when price updates are not enough to cover cost increases.
Compared with costs under current law, the CMS actuaries estimated the legislation’s net cost to the federal government from 2015 through 2025 would be $102.8 billion.
The SGR repeal bill, which also reauthorizes the Children’s Health Insurance Program for 2 more years, passed in the House March 26 with overwhelming bipartisan support. The bill is expected to pass the Senate after members return April 13 from their spring recess.