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Saturday, December 9th 2006

Medicare Stop Gap

I didn’t think it would happen. The lame duck Congress has once again pushed through a stop gap for Medicare cuts,

Though some details had yet to be finalized late Thursday, lawmakers had reached agreement on the legislation that would, among other things, save doctors from an impending cut in Medicare payments. A House vote is scheduled for today.

In case you don’t know Medicare physician insurance (Plan B) has an actual budget, it isn’t just some bottomless pit. If it goes over that budget for a fiscal year (a virtual guaranteed), then a formula known as the SGR reduces physician reimbursement by some percentage. And while it is true that more than any other factor physician reimbursement is driving health care costs, it is also true that physicians lose money on just about every primary care activity which is reimbursed by Medicare.

If you have Medicare your family physician is losing money every time he sees you most likely. The surgeon doing your hip replacement is still doing well, but your family doc isn’t making any money on those office visits.

The reconciliation of those two “facts” is another post. Back to the topic at hand, physicians fight tooth and nail every year to prevent the SGR mandated cuts. This year it looked like Congress would not prevent the SGR from cutting the fee schedule. But now, in what I think is a surprise…it looks like they have the votes to.

The Health Care Blog is up in arms. I encourage you to read the comments and not just the post.

Here’s the Washington Post on the situation.