Goodbye to the Medicare ‘Doc Fix’
Among the more bizarre actions that Congress has had to take over the past several years has been the regular ritual to pass measures preventing reduction in doctors’ fees for Medicare patients. Known as the “doc fix,” the bills were short term fixes for a longer term issue, that is how to control the cost of Medicare spending. One source, the National Academy of Elder Law Attorneys, reported that lawmakers, on 17 occasions since 2003 passed bills to undo scheduled cuts to physicians and reduce the likelihood that doctors would turn away Medicare patients, www.naela.org.
The process all began with the Balanced Budget Act of 1997 which established a formula known as the Sustainable Growth Rate linking doctors’ payments to a targeted rate of growth in the economy. The Sustainable Growth Rate (SGR) was probably never sustainable and all that the old law did was cause anxiety for physicians and patients as each temporary relief measure was set to expire and Congress readied itself to pass new laws to prevent this from happening.
On April 16, 2015 President Obama signed into law a repeal of the Sustainable Growth Rate as a basis for paying doctors under the Medicare Access and CHIP Reauthorization Act of 2015. In a rare exhibition of Republican-Democratic bipartisanship, the law had passed the House of Representatives 329-37 and the U.S. Senate 92-8.
While the law fixes the “doc fix” problem, it contains other provisions of note going forward. There is enough in the law to make almost everyone pleased with some portions and not so pleased with others. However, putting the “doc fix” question to bed for now is one aspect that seems to please almost everyone. This is what you need to know.
First. Instead of the current reimbursement schedule for doctors accepting Medicare patients, payment increases would be built into doctors’ payments from 2015 to 2019. For patients this means that physicians will not be under the apprehension during this time that their rates would be lowered. It should encourage both participation and continued participation in Medicare.
Next. After 2019, physicians’ rates would be based on a merit system taking into account quality as opposed to quantity of services. While a framework has been specified, details would obviously need to be established. There would be no automatic increases and it could be expected that some physicians will benefit while others would lose. From 2026 on, another model is built into the plan.
Next. Since payment mechanisms were built into the bill including those from individuals and others, individual Medicare beneficiaries with incomes exceeding $133,500 (with thresholds higher for couples) would pay more for their Medicare coverage. It is anticipated that this would impact about 2% of beneficiaries. Also, Medigap policies starting in year 2020 would no longer be able to cover the Medicare Part B deductible. Assuming my figures are straight, this would mean that Medicare Supplement Plan “F” would no longer be available to new enrollees. The Medicare Part B deductible is currently $147 per year.
The bill contains other provisions referred to collectively as “extenders” extending previously enacted provisions. Included among these are funding for Medicare therapy services, ambulance services and rural hospitals and a program assisting low income people on Medicaid transitioning to employment. The bill would also permanently extend the Qualifying Individual (QI) program that allows payment of Medicare premiums for very low income seniors. One controversial issue is caps for continued therapy under Medicare. There are exceptions but some, including AARP would like to remove the caps.
Adjustments but not elimination under the law will be made to anticipated increases for post-acute providers, nursing homes, home health and hospice organizations and a delay in phasing in an increase for hospitals.
As the name of the law indicates, the CHIP program, a federal program for health insurance for children whose families earn more than required amounts for Medicaid but still could benefit by lower income health insurance, was reauthorized but does not extend funding beyond fiscal year 2017.
The law also provides for short term funding for community health centers, the National Health Service Corps and teaching health centers.
The law itself shows that compromise can work and there are some issues on which almost all can agree.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.