Legislative Update: July 2015

Legislative Update: July 2015

Congress Passes “Doc Fix”

By Jessie Gibbons, Senior Policy Analyst

After more than a decade of failed attempts to repeal and replace the sustainable growth rate (SGR) – the flawed formula that sets payment rates for doctors who treat Medicare patients – Congress has finally succeeded in passing legislation to do away with it once and for all. In April, lawmakers in both the House and the Senate adopted a bipartisan bill that will permanently repeal the SGR, provide doctors with modest 0.5 percent payment updates over the next five years, and incentivize payment models that reward the coordination of medical care.

President Obama signed it into law shortly thereafter, saying it will improve the Medicare program “because it starts encouraging payments based on quality, not the number of tests that are provided or the number of procedures that are applied, but whether or not people actually start feeling better.” The law took effect immediately, and upon the bill’s signing, the Centers for Medicare and Medicaid Services (CMS) announced that it had already begun reimbursing physicians at the full payment rate.

The Senior Citizens League (TSCL) is pleased that Congress has successfully negotiated a repeal of the SGR, since the flawed formula has not worked as intended for twelve years. It has called for physician pay cuts – some as steep as 30 percent – more than seventeen times, threatening access to quality medical care for beneficiaries. We are hopeful that the new payment system will bring increased stability to the Medicare program.

However, TSCL is opposed to two provisions that lawmakers included in the package to offset its $210 billion cost. One of those provisions will increase monthly premiums for beneficiaries with higher incomes, and the other will create a new $250 deductible for those enrolled in supplemental Medigap plans. Both of them will require seniors to pay more out-of-pocket for their healthcare.

TSCL opposes these new provisions because we feel strongly that seniors should not be required to cover the cost of the poor policy-making decisions that were made by Congress nearly twenty years ago, when lawmakers first created the SGR. According to the non-partisan Kaiser Family Foundation, Medicare beneficiaries will automatically contribute $58 billion in Part B premiums over the next decade to repeal and replace the SGR. TSCL believes any additional cost-sharing – including the two new provisions – will be unduly harsh.

As the law is phased in over the coming months and years, TSCL will monitor it closely, and our legislative team will advocate against the implementation of the provisions that will increase costs for beneficiaries. For updates on its movement, visit our website at SeniorsLeague.org or our new Facebook page at Facebook.com/SeniorsLeague.