The Congressional Budget Office (CBO) Nov. 14 said legislation (H.R. 4015, S. 2000) to replace the Medicare physician payment system would cost $144 billion from 2015 to 2024, a jump from the $138 billion 10-year estimate that CBO made in February when the identical bills were introduced. The SGR Repeal and Medicare Provider Payment Modernization Act of 2014, introduced in February, made a number of changes to the current physician payment model, including creating a merit-based incentive payment system, and offered doctors a slight increase in payment. Following on its February estimate, the CBO’s latest document on the so-called doc fix estimated that freezing physician payment at the current rate through 2024 would cost $118.9 billion, while offering doctors an extra 0.5 percent hike for each of those years would raise the price to $140.2 billion. The freeze would override the Sustainable Growth Rate formula, which each year calls for deep cuts in physician payments. The CBO made its predictions following release of the final 2015 Physician Fee Schedule, which said doctors and other Part B providers face a 21.2 percent cut in reimbursements from the time the current patch expires at the end of March 2015 until the end […]
The Congressional Budget Office (CBO) Nov. 14 said legislation (H.R. 4015, S. 2000) to replace the Medicare physician payment system would cost $144 billion from 2015 to 2024, a jump from the $138 billion 10-year estimate that CBO made in February when the identical bills were introduced.
The SGR Repeal and Medicare Provider Payment Modernization Act of 2014, introduced in February, made a number of changes to the current physician payment model, including creating a merit-based incentive payment system, and offered doctors a slight increase in payment.
Following on its February estimate, the CBO’s latest document on the so-called doc fix estimated that freezing physician payment at the current rate through 2024 would cost $118.9 billion, while offering doctors an extra 0.5 percent hike for each of those years would raise the price to $140.2 billion.
The freeze would override the Sustainable Growth Rate formula, which each year calls for deep cuts in physician payments.
The CBO made its predictions following release of the final 2015 Physician Fee Schedule, which said doctors and other Part B providers face a 21.2 percent cut in reimbursements from the time the current patch expires at the end of March 2015 until the end of the year unless Congress acts.
Temporary Patch
If Congress passes another temporary freeze that runs to the end of the year after the current one expires on March 31, it would cost $13.6 billion over 10 years. It also would result in a reimbursement cut of 17 percent in 2016, the CBO said.
Congress’s budget analyst each year readjusts its estimates following the release of the upcoming year’s fee schedule conversion factor, which converts units attached to doctors’ services into a dollar amount.
“The revised reduction in payment rates for April to December of calendar year 2015, as well as other information provided in the final rule, change CBO’s projections of Medicare payment rates for services provided on the [fee schedule] for 2015 and for future years,” the Nov. 14 document said.
After H.R. 4015 and S. 2000 were introduced in February, leaders of the two parties reached an agreement to freeze pay rates for a year and to include “extenders,” which continued funding for other health programs that were set to expire.
The measure—Pub. L. No. 113–93—was signed by President Barack Obama on April 1.
Takeaway: The Congressional Budget Office’s estimates of the 10-year cost of repealing and replacing the Sustainable Growth Rate formula have increased from $138 billion to $144 billion.
