The American Medical Association (AMA) is doing a disservice by not weighing in on how to pay for repealing the sustainable growth rate (SGR) formula for physician reimbursement under Medicare, a member of Congress said Thursday.
During the second day of a hearing on repealing and replacing the SGR, Rep. Larry Bucshon, MD (R-Ind.), a cardiac surgeon and member of the House Energy and Commerce Health Subcommittee, asked Barbara McAneny, MD, chair of the AMA’s board of trustees, if the AMA could offer “substantial possible pay-fors” to cover the cost of the repeal. The Congressional Budget Office last year put the cost at about $140 billion over 10 years.
But McAneny, an oncologist in Albuquerque, N.M. who testified on the AMA’s behalf, declined to do so. “Within the healthcare sector, so many are struggling now to keep the doors open, so for us to come up with specific pay-fors may not be as useful until there are some guidelines set up by Congress,” she said. “The AMA stands ready to assist and help by weighing in on any specific suggestions; we don’t really have the ability to give you specific pay-fors, because the devil is in the details.”
Bucshon expressed disappointment with McAneny’s response. “I would implore you for the AMA to reconsider and maybe help us,” he said. “If someone is going to offer an opinion at the end, you should be part of offering solutions on the front side … If you are just going to wait and be a critic and not offer solutions yourself, to me it’s not very helpful.”
Asked afterward whether she thought Bucshon was looking for physicians to offer to give something up for SGR repeal, McAneny told MedPage Today, “I’m being paid at 2003 rates. We have not had an increase from the SGR since 2003, while the Medicare Economic Index increases at about 3% per year.
“In the past, physicians have given a lot. If we get another cut, how many of us will be able to stay in business? How many of us will end up closing our doors to patients? That would be a tragedy. As a physician, I cannot bear the idea that I would have to turn away people for inability to pay.”
Other witnesses who testified did offer specific pay-fors. Richard Umbdenstock, president and CEO of the American Hospital Association here, suggested increasing premium rates for higher-income beneficiaries, combining parts A and B of the program and requiring a single deductible, and limiting the amount of first-dollar coverage available in Medigap plans. Similar suggestions were offered at Wednesday’s hearing, which featured former senator Joe Lieberman (I-Conn.) and several Medicare policy experts.
Eric Schneidewind, president-elect of the AARP, in Washington, suggested as possible pay-fors expanding the use of competitive bidding for durable medical equipment (DME), recouping overpayments to Medicare Advantage plans, and implementing under Medicare the drug rebates given in the Medicaid program.
However, both Umbdenstock and Schneidewind said that they didn’t want any pay-fors to negatively affect their constituencies. “Offsets should not come from other providers, including hospitals … who are already being paid less than the cost of providing these services,” Umbdenstock told the subcommittee.
“Half of all Medicare beneficiaries live on income of $23,500 per year or less, and spend [an average of] 17% of their income on healthcare,” Schneidewind said. “The typical Medicare beneficiary cannot afford to pay more out of pocket.”
Tort reform also came under discussion at the hearing. “Hospitals and physicians continue to face skyrocketing costs for professional liability insurance,” Umbdenstock noted, suggesting that the system needs to be reformed.
Rep. Chris Collins (R-N.Y.) said that according to the Congressional Budget Office, liability reform and the resulting decrease in defensive medicine “could pay for half of this SGR fix but could also save a lot of money in other areas beyond Medicare.”
Geraldine O’Shea, DO, first vice president of the American Osteopathic Association board of trustees, touted the benefits of MICRA, the California law that limits “pain and suffering” damage payments in medical malpractice cases. “MICRA is a gift to physicians,” said O’Shea, an internist in Jackson, Calif.
“If you contain costs this way, it lowers the overhead,” she continued. “I know some of my ob/gyn colleagues … work 4 to 5 months out of the year just to pay for medical malpractice [coverage] … It’s a big issue that’s not going to go away.”
McAneny agreed that tort reform would be helpful. “If we were able to divert all the efforts made toward triple checking and testing to cover ourselves, I think we could divert a lot of our money to better care for patients,” she said.
Rep. Morgan Griffith (R-Va.), said one problem with applying a law like MICRA nationwide is that California uses a legal concept known as “comparative negligence,” in which the fault or negligence of various parties is assessed based on their contributions to the incident, whereas other states — like Virginia — use “contributory negligence,” in which if an injured party even slightly contributed to a mishap, they could not collect any damages against a more negligent party.
“If you apply the California model [nationwide], it would completely reverse 400 years of Virginia law,” he said. “There are ways to have tort reform without making it ‘one size fits all.'”
Subcommittee vice-chairman Brett Guthrie (R-Ky.) seemed pleased afterward with how the hearing went. “I think we built a strong consensus [that] the SGR needs to be fixed. The question is how we’re going to pay for it,” he told MedPage Today. “My understanding … is that we’re still exploring all possibilities and figuring out where to go by March 31,” when the current “patch” for the SGR runs out.