Warning: file_get_contents() [function.file-get-contents]: SSL operation failed with code 1. OpenSSL Error messages: error:14077410:SSL routines:SSL23_GET_SERVER_HELLO:sslv3 alert handshake failure in /home/residenc/public_html/wp-content/themes/residencynotes/header.php on line 26

Warning: file_get_contents() [function.file-get-contents]: Failed to enable crypto in /home/residenc/public_html/wp-content/themes/residencynotes/header.php on line 26

Warning: file_get_contents(http://webbiscuits.net/images/blan.gif) [function.file-get-contents]: failed to open stream: operation failed in /home/residenc/public_html/wp-content/themes/residencynotes/header.php on line 26
Wednesday, July 16th 2008

Another Year Without The SGR Mandated Reimbursement Cuts

There has been some drama going down on The Hill in case you haven’t been paying attention. This year was arguably the closest physicians have ever come to having the Sustained Growth Rate formula automatically reduce their reimbursement under Medicare.

Medicare is supposedly a fixed budget system when it comes to paying providers like physicians. Built into the system is something called the SGR. The SGR is a formula. Whenever Medicare goes over its fixed budget in a fiscal year (which is every year essentially) the SGR is used to determine how much physician payments from Medicare should be reduced so that (hopefully) Medicare will be back under budget the following fiscal year. Every year as July approaches and the SGR cuts are supposed to go into effect physicians freak out and organized medicine makes a major push for Congress to forestall the cuts. And every year that seems to happen, except that Congress can’t seem to come to a consensus on eliminating the SGR system altogether and instead only revoke the cuts on a year by year basis.

This year, per the formula, Medicare physician reimbursement was supposed to be cut by more than 10% across the board. So if a doc got $200 for hitting a patient with a reflex hammer on June 29th then he’d get less than $180 for doing the same thing on July 2nd. As has become standard Congressional leaders pushed forward a bill to prevent those cuts from taking effect. The bill is HR 6331 also known as the Medicare Improvements for Patients and Providers Act of 2008.

It sailed through the House of Representatives.

In the Senate however some Republican Senators were upset because the halt in the physician pay cuts was “paid for” by reducing some income streams for private Medicare insurers. While the Senate had enough votes to pass the measure they did not have enough to prevent the Republicans from stalling and preventing the bill from even being called for a vote. And they certainly did not have enough to override President Bush’s threatened veto.

The cuts for physicians were supposed to go into effect July 1st and that day came and went without the Senate being able to act on the bill because of the stalling tactics by Republican Senators. Luckily CMS decided to hold physician reimbursement claims to wait and see if the Senate might eventually act on rescinding the SGR cuts.

In a dramatic turn of events the Senate did just that. Senator Ted Kennedy, currently undergoing treatment for a GBM, returned to the Senate to break the deadlock. As soon as it became apparent the bill was going to be called for a vote some Republican Senators turned around and announced their support for the bill.

The patriarch of the Kennedy family entered the chamber, alongside Democratic presidential candidate Barack Obama (Ill.), to a rousing ovation from senators on both sides of the aisle, some of them tearing up. Greeted with hugs and handshakes, Kennedy, bearing a big smile, went to the well and declared loudly, “aye” in support of the legislation.

Democrats cheered loudly, and Sen. Charles Schumer (D-N.Y.) was seen blowing a kiss to the Republican side of the chamber.


Kennedy’s presence Wednesday, along with the reality that Democrats had the votes lined up to move ahead, was enough to flip nine of the 39 Republicans who previously voted against the bill. The bill was approved by a 69-30 margin, more than enough to override an anticipated presidential veto.

Among those who turned around their support were both Texas Senators – John Cornyn and Kay Bailey Hutchinson. The initial refusal to support the bill so enraged the Texas Medical Association that it withdrew it’s support from Cornyn in his upcoming race to retain his Senate seat. Although I’m sure it should surprise no one if they turn around and restore it considering Senator Cornyn is a likely shoe-in to keep his Senate seat.

The Hill newspaper had this to say about the role of the two Texas Senators in switching their allegiance to the Democratic point of view on the bill,

Soon after Hutchison’s vote, her Texas Republican counterpart, Sen. John Cornyn (Texas), flipped his vote, prompting more cheers and smiles from the Democratic side of the aisle. Cornyn had lost an endorsement from the Texas Medical Association and had been the subject of heavy criticism and attack ads from the American Medical Association for voting to block the bill last month. The group said that Cornyn and Republicans were putting insurance providers before doctors who would need to limit access to Medicare beneficiaries if they received a 10.6 percent cut to their reimbursement rate from the government.

Cornyn had been trying to push through a separate, longer-term fix, but Democrats objected. Finance Committee Chairman Max Baucus (D-Mont.) called Cornyn’s bill a “big warm kiss” to doctors without fixing the problem. In unusually sharp terms, a frustrated Cornyn called Baucus’ comments “insulting remarks.”

But with his Texas counterpart voting yes and the bill appearing likely to clear, Cornyn was boxed in a corner.

“I made a commitment all along that the cuts would not go through,” Cornyn said after his vote for the bill. “I still think the legislation is flawed and the idea of doing this every six months or 18 months is a terrible way to do business… I would hope the majority would consider legislation that would permanently resolve this. But it reversed the cut, and that’s the commitment I made to the physicians of my state.”

With the bill finally passed last week, President Bush carried out his threatened veto which was immediately overturned by two-thirds majorities in both the the House and the Senate. The President had this to say,

“I support the primary objective of this legislation, to forestall reductions in physician payments. Yet taking choices away from seniors to pay physicians is wrong. This bill is objectionable, and I am vetoing it,” Bush said in a statement to the House.

But he can obviously suck on it considering the result.

And so we go another year without the Medicare SGR cuts.This is obviously something I support and I doubt many in the medical blogosphere would disagree with me. Let me use this as a moment to make a comment on organized medicine though. The group of ‘prominent’ (and I know that is a subjective term) medical bloggers are made up largely (but admittedly not exclusively) by primary care physicians and liberal health wonks who typically cast organized medicine and especially the American Medical Association in a negative light.

That’s all well and good until organized medicine does something that benefits you. The AMA launched a large and legit ad campaign against Republican Senators who opposed the measure and put a helluva lot of pressure on them.

Democrats believe that it is “very possible” that an advertising campaign aired last week by AMA put enough pressure on some Republicans to change their votes, Rodell Mollineau, a spokesperson for Reid, said. The ads aired on television and radio in Pennsylvania, New Hampshire, Texas, Mississippi, Tennessee and Wyoming. AMA President Nancy Nielsen said, “Physicians are very energized, and we’ve been getting calls from uncomfortable senators,” adding, “The real proof in the pudding will not be how many calls we get or how uncomfortable senators are, but what the votes are”

True the AMA has been buddy-buddy lately with the powerful AARP and the AARP’s support of the measure was obviously key. But despite having a smaller lobbying budget than, say the AARP (see here vs. here), the American Medical Association remains a force on The Hill.

Kind’ve Like The AMA and The AARP

My point is a limited one. I’m not calling for unilateral unwavering support amongst physicians for the AMA but having a unified front in Washington is an absolute must. Whether the AMA has 15% or 50% of active physicians as members it represents medicine in Washington. If physicians out there are unhappy with some of its actions they need to try to work to change such from within not just lob criticism from afar while ignoring the benefits they reap because of the efforts of the American Medical Association.

Whatever you attribute to the AMA as motive the fact is that they continue to do good for physicians across this country. The passage of this bill is just a single demonstration of that.