Beware Congress’s Medicare SGR replacement

The Club for Growth doesn’t like it.  Congresswoman Renee Ellmers appears to LOVE it.    The “it” I am capitoltalking about is Congress’s plan to replace the “Sustainable Growth Rate” formula for Medicare.  (I’ve been pretty happy with the Club For Growth’s record on fighting big government.  Can’t say the same for my congresswoman’s.) 

Here is some of Big Government Barbie’s argument FOR replacing the SGR:

Over the last 12 years, Congress has spent nearly $150 billion crafting makeshift provisions in an effort to patch a problem that is in dire need of more than just a temporary Band-Aid. Without question, the Sustainable Growth Rate (SGR) is one of the biggest challenges facing the Medicare system to date, and Congress’ failure to pass a permanent fix to SGR has had considerable consequences on our nation’s seniors and physicians.

For more than a decade, doctors have faced uncertainty as to whether or not they will endure massive cuts in their Medicare payments—and this year is, unfortunately, no different. 

Unless Congress acts by March 31, doctors face a 22-percent cut to their Medicare payments, which will undoubtedly have a negative effect on their ability to treat Medicare patients and ultimately hinders seniors’ access to quality care. 

The entire medical community recognizes the problem with the SGR, and now Congress has a responsibility to stop the bleeding.Renee Ellmers

Instead of letting yet another golden opportunity pass us by, it’s time for Congress to permanently repeal and replace the SGR formula for Medicare reimbursement.

Congress introduced the SGR formula in 1997 in an effort to keep Medicare spending down. While the formula was initially effective, it failed to consider the rising cost of medical services and the likelihood of a fluctuating economy.  Because the SGR formula is tied directly to our nation’s Gross Domestic Product (GDP), it has proven over time to be ineffective as the reimbursement formula is based on an assumption that there will be economic growth each year.  

Because of the flawed formula, Congress has had to pass temporary patches each year since 2003 in order to preserve reimbursement funding for doctors treating Medicare beneficiaries. In total 17 temporary patches, also known as the “Doc Fix,” have been enacted since 2003 in order to prevent these unsustainable cuts. 

The total cost of these short-term patches amounts to nearly $150 billion taxpayer dollars —which is almost the total cost of repealing and replacing the flawed law itself.  This inefficiency has created dysfunction within our healthcare system and generated dissatisfaction among healthcare providers. Furthermore, temporary fixes do nothing to provide certainty and stability for our seniors and our physicians who care for them.[…]

It’s time we in Congress do our job and show leadership by enacting permanent legislation to repeal and replace the flawed SGR formula. The entire medical community recognizes the problem with the SGR, and now Congress has a responsibility to stop the bleeding. We have drafted a meaningful, proactive solution—and now Congress must have the courage and political will to see it through. Continually kicking the can down the road is only perpetuating Washington’s spending problem, while yet another SGR deadline quickly approaches. Snip20150321_2

In the health care realm, every passing minute comes at a price. Our nation’s seniors deserve more than a temporary patch. They need certainty, they need reliability, and we owe them a permanent solution to a problem that has been left deteriorating on life support for far too long.

That all SOUNDS great.  But The Club For Growth raises concerns about this congressional legislation doing further damage to our economy:

[…] For the past decade and a half, Congress has routinely passed “doc fix” bills that increased reimbursements to health care providers in the face of scheduled cuts. These fixes papered over the well-intended Sustainable Growth Rate (SGR) formula that tried to tamp down health care costs, but was extremely flawed. In any legislation replacing the SGR formula, the Club’s top concern is that it is fully paid for with sensible reforms. Unfortunately, this bill falls woefully short of that goal. News reports state that the 10-year cost of the new bill is $200 billion, of which only $70 billion will be offset. Part of this huge price tag is a 2-year extension of CHIP, a program that should be terminated. Worse, a cost estimate by the Committee for a Responsible Federal Budget suggests this bill will add $400 billion to the national debt over 20 years. All of this, of course, assumes that Congress will abide by the $70 billion offset. But we consider it far from certain that they will.

If an official cost estimate comes out that shows this bill is fully offset by real spending cuts or reforms, the Club will remove its objections to the plan.[…]