Earlier today, the House passed a bill that repeals the SGR formula used to derive physician reimbursement under Medicare. For more specifics on the SGR, see a previous post I wrote at http://wp.me/ptUlY-ae . The legislation is title SGR Repeal and Medicare Payment Modernization Act.
Unfortunately, the fate of the legislation is predestined as the bill includes an amendment from the Ways and Means Chairman (Rep. Dave Camp) that delays implementation of the tax/fee penalties concurrent with the Individual Mandate. It does not repeal or delay the mandate, simply the punitive measures for those that don’t comply. Recall, the Affordable Care Acts requires all individuals above a certain income limit (tax filing limit) or without expressed hardship, to obtain health insurance by April of this year or face a penalty. The penalty embedded within the act is a flat dollar floor with amounts increasing based on gross income. With certainty, the inclusion of the amendment in the legislation spells a death sentence in the Senate where Senate Democrats hold a majority and Leader Reid, controls the flow of legislation for vote. The bill will never see a vote in the Senate due to the Camp amendment.
The sticking point on repeal of the SGR is cost. The Congressional Budget Office estimates that a repeal of the SGR, shifting to an indexed option with market baskets and productivity adjustments, will cost $138 billion over 10 years. The dollars would need to come from an already shaky Medicare program that today, doesn’t really have another source of revenue save tax increases or contra-revenue infusions via reduced provider payments elsewhere in the industry. The funding dilemma that occurs with the Camp amendment is that such an amendment actually saves the government $169 billion. The savings is achieved by a projection of fewer people, sans the mandate penalty, having health insurance including under Medicaid and SCHIP (or CHIP). With fewer people accessing the government-funded entitlement programs, the outflow is less, savings in amounts greater than the SGR repeal costs.
Once again, a fascinating insight into current federal health policy and the economics at play…
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