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Medicare SGR cuts blocked for 2011; work begins on long-term solution



December 12, 2010
Area(s) of Interest: Advocacy Health Care Reform 

Congress last week passed a measure blocking the 25 percent Medicare cuts scheduled to take effect on Jan. 1 for a year, through Dec. 31, 2011.

The one-year patch, however, freezes Medicare reimbursements and does not include an update. Furthermore, it does not include the Medicare Geographic Cost Price Index (GPCI) payment locality update the California Medical Association (CMA) has been advocating.

CMA, AARP and the American Medical Association (AMA) joined in thanking Congress for acting but said it is crucial for lawmakers to take the next step and repeal the Sustainable Growth Rate (SGR) formula once and for all.

"We have bought some time," CMA President James Hinsdale, M.D., said in a press release. "Now it's crucial that we roll up our sleeves and work with Congress to fix the problem for good by eliminating the flawed Sustainable Growth Rate (SGR) formula and replacing it with stable, rational funding seniors and doctors can count on."

CMA joined with AMA and AARP to mount an aggressive grassroots campaign to stop the Medicare cuts. CMA mobilized California physicians and their Medicare patients to contact their elected representatives, and posted a six-minute video on YouTube showing how poor reimbursements are hurting doctors and patients.

"This one-year reprieve will mean nothing if Congress does not take seriously President Obama's call for a permanent solution," Hinsdale said.

CMA is working with a very small group of state medical associations and specialty societies through the AMA to develop an alternative to the SGR to present to Congress.

The one-year reprieve does not provide a payment update in Medicare rates to cover inflation. The Medicare economic index rose half a percent, but Congress did not add that into the bill, unfortunately. However, physicians received a 2.2 percent update during 2010 that was above the Medicare economic index increase.

The other payment reforms included in the health care reform bill, such as the primary care and general surgery bonuses, will still take effect.

Please be sure to thank your congressional representatives and our U.S. senators who voted to stop the cuts and who also voted to repeal the SGR earlier this year. The total cost of the legislation was nearly $20 billion and it was the first time in more than five years that Congress paid to stop the SGR cuts rather than funding it by increaing the cuts in future years.

The GPCI fix was under discussion as part of the bill, but the day before the vote, Sen. Mitch McConnell, the ranking Republican leader, ruled out making any Medicare policy changes in the legislation.

Reps. Sam Farr, D-Carmel, and Darrell Issa, R-Vista, made herculean efforts to include the California GPCI fix in the final bill and deserve physicians' thanks.

Thank you for all your support and advocacy with the California congressional delegation. No other delegation has a better voting record on the Medicare issues than California's.

This was an organized effort that demonstrates the strength of physicians truly working together. a $20 billion bill is a significant investment in patient care in this political and economic environment.


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