Hooray! The Medicare Doc Fix Is Fixed Until Next April!

Congress has given up on repealing the Sustainable Growth Rate (SGR) as a way to pay physicians under Medicare. Last June, John Goodman wrote in this blog about the futility of politicians’ efforts to “fix” the way they pay physicians.

At the end of 2013, Congress passed another short-term fix that prevented physicians’ reimbursements from being cut by one quarter until March 31 — a three-month fix — which I analyzed in a post last December (and compared it to a Soviet-style price fixing system).

Last week, lawmakers passed another fix, this one running for a year. And, just as always, these politicians who are elected for two-year to six-year terms voted to massively increase spending today, in exchange for significant cuts a decade hence.

According to the Congressional Budget Office’s score of the bill, it increases Medicare’s physician payments by $15.8 billion over ten years. However, $11.2 billion (71 percent) is spent by 2015, and $13.3 billion (84 percent) is spent by 2016.

The savings to pay for this? Those come later, much later: Savings don’t exceed spending until 2020, and not significantly until 2024 – the last year of the mandated scoring “window”, when the law is supposed to claw back $9.3 billion from hospitals and re-impose the sequester on Medicare.

Good luck with that. Congress continues to make a mockery of Medicare-physician payment reform.

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For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.