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President Obama’s New Budget Proposes A 2-Year Medicare ‘Doc Fix’

President Obama’s New Budget Proposes A 2-Year Medicare ‘Doc Fix’

The Chiro.Org Blog


SOURCE:   MedScape


February 14, 2010 — President Barack Obama’s proposed budget for fiscal year 2012 would delay a massive reduction in Medicare reimbursement for physicians from January 1, 2012, until January 1, 2014, and freeze rates in the meantime.

Released this morning, the budget for fiscal year 2012, which begins October 1, would finance this so-called “doc fix” to the Medicare reimbursement crisis by, among other things, reducing the Medicaid provider tax threshold, reducing Medicaid outlays for durable medical equipment, and speeding new, lower-cost generic drugs to the marketplace. These measures would raise $62.2 billion, which would offset the $54.4 billion cost of the 2-year doc fix and yield an additional $7.8 billion in savings.

Last December, Congress passed a nearly $15 billion doc fix that delayed a 25% cut in Medicare rates from January 1, 2011, to January 1, 2012. The legislation froze rates at 2010 levels. If Congress enacts Obama’s new 2-year fix, physicians will not receive a Medicare raise for 3 years running.

The pay cut once scheduled for January 1, 2011, had been mandated by the so-called sustainable growth rate (SGR) formula that Medicare uses to set physician pay. Organized medicine has lobbied Congress for years to replace the SGR formula with one it considers more equitable for physicians. Congress has been overriding SGR-required pay cuts since 2003, causing them to balloon in size.

Obama’s new budget calls the 2-year doc fix a “down payment” on a permanent solution to the SGR problem and specifies $315 billion in “SGR relief” from 2014 through 2021. The budget lists a corresponding amount in unidentified offsets.

SGR relief is also on the radar of Congress. Last month, in a 428-1 vote, the House approved a measure calling for a permanent doc fix. Lawmakers are worried that cutting Medicare reimbursement by 25% or more would drive physicians from the Medicare program, reducing access to care for seniors as well as military families, whose TRICARE coverage is based on the Medicare fee schedule.

6 comments to President Obama’s New Budget Proposes A 2-Year Medicare ‘Doc Fix’

  • [...] This post was mentioned on Twitter by Dr. Stephanie Maj and ChiroResource, Chiro.org. ChiroResource said: New Post: : Obama’s New Budget Proposes A 2-Year Medicare ‘Doc Fix’ http://bit.ly/eNs8pl [...]

  • karl

    those that oppose Medicare in the political arena will favor these cuts as it will surely convince many that Medicare doesn’t work. well it can’t/won’t work if under funded. the notion that the “free market” will fix the health care system is wishful thinking. more people are getting priced out of comprehensive health care insurance putting an ever growing burden on the social safety net programs.

  • Maine Chiropractor

    The free market WOULD fix health care, IF health care operated in one. Instead we have an unholy amalgam of government, private, and quasi government insurers, non-profits and third party contractors. Nothing in that mess even begins to approach being “free market”. There are four major causes of rising prices in the healthcare market, and in every case government intervention has either directly caused or greatly exacerbated the problem.
    1.Employer provided health insurance
    Employer-provided health insurance has its origin in a tax policy passed in 1943, which made insurance provided by employers tax free. At the time the United States was engaged in World War II and had enacted wage and price controls, preventing employers from competing for scarce labor using the normal mechanism of offering a higher salary. Instead, businesses used the availability of newly tax-subsidized healthcare as a means of differentiating themselves from their competition.
    2.Licensure
    Is a government license any guarantee of getting a quality provider? As economist Milton Friedman pointed out,
    “It is clear that licensure is the key to the medical profession’s ability to restrict the number of physicians who practice medicine. It is also the key to its ability to restrict technological and organizational changes in the way medicine is conducted.”
    From this perspective, licensure is an impediment to efficiency and ultimately cost control.
    3. Obesity
    Government policy has played a pivotal role in encouraging the production of unhealthy foods supplied to American consumers. It is estimated that Americans consume 73 pounds of corn-derived sweetener per person per year, and the growth of corn-based sweeteners is a direct result of the government’s farm policy, which subsidizes corn production. A basic consequence of economic law is that when something is subsidized, more of it will be produced. This is a virtual guarantee that the cheapest source of calories available is also the most disease causing.
    4. Patents on Drugs and medical devices
    Patents are not a natural outcome of the free market but are government-granted monopolies on production. Contrary to conventional economic wisdom, patents are not an unequivocal benefit in fostering the development of ideas. The existence of patents is, on the contrary, a clear contributor to the high cost of medical treatments available to American consumers. Ask yourself if there are any techniques within chiropractic that you’d like to learn, but you balk at the insane cost of attending the seminar? Is this good for the patient?

    Just my 2 cents.

  • karl

    “Maine” I’ll agree to disagree. The so-called “free market” will not be allowed to exist in a for profit health care system in this country. Furthermore it won’t fix the health care crisis. Absolute free market doesn’t happen. Sounds good but not a reality.

  • Maine Chiropractor

    More government in healthcare cannot possibly help. Have you noticed the exodus of Canadian chiropractic students to the US? When I was in school many didn’t even bother with the Canadian board exams. As bad as things are here, it’s still more profitable to be a doctor in the US than in a country with a nationalized system. Laissez Faire needs to make a comeback. It’s been about a century of meddling in the market that has brought us to where we are.

  • As a provider I long ago gave up on Medicare as having any meaningful impact on my business. Super-low reimbursement, only covering manipulation & HUGE fines for submission errors — it’s almost like they’re actively discouraging you from becoming a provider.

    I truly feel for the patients, though.

    These cuts keep getting postponed because, as the article stated, there would be no doctors left to provide services if they happened. I’m no economist, but I feel that the answer has to lie in more efficient and reasonable use of our tax revenue. I am a social liberal & fiscal conservative, and I despise each party with equal fervor. :)

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