Now that the U.S. House of Representatives has voted down a higher debt ceiling for the U.S. government, Congress can go back the drawing board on deciding how many Medicare spending cuts the voters and stakeholders can stomach, but as always, there are pockets of concern within the larger picture. The picture for device makers is somewhat complicated in part because the Medicare Part B “doc fix” is a $30 billion-a-year overhang that will be tough to resolve, not just because of the positions taken up on each side of Capitol Hill.
On the Senate side, Kent Conrad (D-North Dakota), chairman of the Senate Budget Committee, hinted a few weeks back that he would not seek offsets for the doc fix – an artifact of the sustainable growth rate (SGR) mechanism – as reported in the May 4 edition of Medical Device Daily, but that position may be softening if a more recent report in The Hill is any indication. Conrad is said to have indicated he might be amenable to at least some offsets somewhere in the Medicare program for an SGR overwrite, but he kicked that porcupine away, stating, “we don’t specify” the amount of offsets “because we don’t decide that. The Senate Finance Committee decides that.”
On the other side of Capitol Hill, House Budget Committee chairman Paul Ryan (R-Wisconsin) is sure to take a harder line on finding offsets for SGR, given the more aggressive budgetary stance found in the House. The next question might seem to be: “Where do they find offsets?” Or the question might be: “Can they find offsets?”
Finding offsets will prove pretty difficult if only because Medicare is already an accounting nightmare. For instance, the long-term care bill that was attached to the Patient Protection and Affordable Care Act is sure to be grossly underfunded even if administered as written, and the idea that our government will force beneficiaries to contribute for the full five years before they can receive benefits is a bit tough to believe. After all, someone is going to need it before they’ve kicked in their share, and who on Capitol Hill is going to ignore a phone call from that constituent? Given Congress’s reputation for micromanaging operations at the Centers for Medicare & Medicaid Services, this is like asking me to land a job playing hoops in the NBA. In both cases, it’s vaguely funny but in the end is a largely futile attempt at humor.
Then we have to look at the double-counting assumed in the Affordable Care Act for both expanded enrollment in public programs and the expected extension of the Part A hospital trust fund, which seems to suffer from a progressively worsening case of the actuarial blahs. As reported in the May 17 edition of Medical Device Daily, the trust fund may go dry by 2024, five years earlier than the Medicare Trustees projected last year. I’ll go out on a limb and forecast that negotiations with drugmakers will not provide sufficient offsets in the Medicare Part D prescription drug program, and as we noted in the June 1 edition of Medical Device Daily, many people working inside the Beltway believe there’s little more to be wrung out of Part B imaging. So much for the virtue of counting one’s beans twice.
And the new centerpiece in all this is the draft guidance for accountable care organizations, which the top-shelf healthcare providers such as Intermountain and Geisinger pretty much laughed off. I don’t believe the ACO program is aimed at the top providers at all, but as was the case with the hospital quality demo, some of the participants will actually lose money in the ACO program, and there’s not much to be made in it to begin with. The difference here is that hospitals and other providers have seen this routine before and are sure to be much more wary of any governmental prestidigitation, especially where start-up costs are concerned.
The House Energy and Commerce Committee’s health subcommittee tackled the SGR dilemma in the second week of May, and the committee’s members were very nice to each other. They were also nice to the witnesses at the hearing, including Cecil Wilson, MD, the boss of the American Medical Association (AMA; Washington) who along with others lobbied for a statutory excision of SGR and a five-year program for Part B reimbursement, including a “menu” of payment rubrics doctors could pick and choose from. Let’s not forget that Wilson and Co. also lobbied for more money each of those five years. Five years at $30 billion comes to $150 billion, which nowadays is real money, even in Washington.
As a member of the media, I almost hate to see SGR vanish. It has filled out a lot of column inches in my Washington roundup, and saying or writing “doc fix” makes me feel like I’m in the know. All the same, I suspect I have nothing to worry about. If I had to bet, I’d bet that SGR goes on hiatus for a year – two at the most – but I just can’t imagine the phrase “doc fix” is ready to vacate its place in the lexicon of Medical Device Daily.