The DJP Update

DJP Update 2-5-2014  The SGR mess and the solution.

The Medicare Sustainable Growth Rate (SGR) is a price-fixing law in Medicare.  There are three committees of jurisdiction in Congress:  the Senate Finance Committee, the House Committee on Energy and Commerce, and the House Committee on Ways and Means.

There is movement to get rid of the SGR because of the ticking clock of looming dramatic cuts.  But a critical question is whether physicians will be able negotiate a fee with patients regardless of what the government pays.  An example of that method is what Australia does in its Medicare system.  Unfortunately, I believe Congress will not give up control of the price-fixing of the total fee but instead will deliver a new law that may remove the term SGR and give a very small increase in payment in exchange for additional chains on the physician, including “quality” determined by bureaucrats.  Combine this approach with the unfolding disaster of PPACA and it is easy to see why physicians are discouraged and why there will be a crisis in access to care for patients.  I believe many physicians who are able will get out of all government programs and do direct contracting with patients. This is hard to do if you are a specialist such as a cardiac surgeon or a neurosurgeon requiring hospital facilities!  Other physicians will become employees of large entities.  The current system allows folks in Congress to ask for donations each year to get the system fixed but the system never gets fixed and the fund raising continues.

Here is an article published today that is worth reading.  As mentioned in the article, this is what is needed:

EXCERPT:

While Medicare has issued subsequent regulations, this insulting provision is still on the books. As Drs. Donald Palmisano, Daniel Johnson, and William Plested—three former presidents of the American Medical Association—have written, “The right of patients to privately contract with physicians to ensure they have the medical care they want, without penalty—regardless of what the government pays—must be recognized and protected.”
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End of excerpt.

Comment:  Until national medical and specialty societies insist on that provision as the sine qua non, the mess will continue.  Don’t negotiate the length of the chains.  Choose liberty.  After all, we are Americans and not serfs.
And don’t forget the years of meetings and policies passed at AMA advocating that right to privately contract with patients.  Here are just a few examples:

NOTE: Balance-billing in Medicare and the right to privately contract has been AMA policy since the 1980s & 1990s.  And, pay attention to this policy in 2009

EXCERPT from policy passed at Annual 2009:  H-383.991 Right to Privately Contract

Our AMA includes in its top advocacy priorities: (1) the enactment of federal legislation that ensures and protects the fundamental right of patients to privately contract with physicians, without penalties for doing so and regardless of payer within the framework of free market principles with the goal of accomplishing this by 2010

Also see policies H-380.994, H-380.989, H-165.916, etc.

Does no good to pass policies if they never get enacted by Congress.  Time for a new game plan.

And never forget Section 1801 of the original Medicare law:  “Prohibition Against Any Federal Interference…or control over the practice of medicine…or compensation…of any…person providing health service… (More details on pages 255-259 in Notes section of my book, ON LEADERSHIP. 1st edition 2008)  Keep that in mind with promises made in Congress.

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Now on to the full article Published in THE FOUNDRY of THE HERITAGE FOUNDATION by Robert Moffit.  He is Director of The Heritage Foundation’s Center for Health Policy Studies.

http://blog.heritage.org/2014/02/05/replacing-medicare-sgr-congress-expand-options-doctors-patients/

Replacing the Medicare SGR: Why Congress Should Expand Options for Doctors and Patients

Robert Moffit
February 5, 2014 at 1:54 pm

Currently three major congressional committees are working feverishly to finalize language to repeal and replace the Medicare Sustainable Growth Rate (SGR). Whether they will succeed in protecting the practice of medicine from intrusive government interference remains to be seen.

The Balanced Budget Act (BBA) of 1997 created the SGR physician payment update formula, an epic failure in health policy. But the BBA also imposed an unprecedented statutory restriction on the right of doctors and patients to enter into private agreements outside the Medicare program to deliver services covered by Medicare.

The BBA allowed Medicare patients to enter into private agreements with doctors and pay them directly for any medical services covered under Medicare—but only if the doctor signed an affidavit of the contract, submitted that affidavit to the Department of Health and Human Services within 10 days of the agreement, and refrained from billing Medicare for the treatment of any other Medicare beneficiary for a period of two years.

So, under the terms of the statute, if a patient did not want to submit a claim to Medicare and pay a doctor directly—for any reason—she would not be able to do it unless the doctor could afford to give up his Medicare practice for two years. The unspoken assumption was that seniors might be gouged by predatory physicians, a class of professionals who bear special supervision—unlike, say, lawyers.

In 1997, the Clinton Administration claimed that the BBA “liberalized” private agreements between doctors and patients. Not true. No Medicare law specifically forbade private agreements between doctors and patients. And in previous federal case law, a federal judge (in Stewart v. Sullivan, 1992) also found that no law or federal policy forbade any such private agreements.

While Medicare has issued subsequent regulations, this insulting provision is still on the books. As Drs. Donald Palmisano, Daniel Johnson, and William Plested—three former presidents of the American Medical Association—have written, “The right of patients to privately contract with physicians to ensure they have the medical care they want, without penalty—regardless of what the government pays—must be recognized and protected.”

Another provision (enacted in 1989) forbids doctors to charge patients any amount above Medicare’s payment, i.e. a price control. A much better policy would allow doctors and patients to negotiate any difference between what the government pays and the doctors’ fees. Under such a policy, Medicare physicians would be allowed to accept the base Medicare payment and forgo any government bonus payment, but they would be required to disclose the prices of their services beforehand. This would create real price competition among physicians and drive innovation and quality in health care delivery.
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Stay well,

Donald

Donald J. Palmisano, MD, JD, FACS
Intrepid Resources® / The Medical Risk Manager Company
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