APA, Other Medical Groups Could Face Unpleasant Choice

Repeal of the sustainable growth rate component of the Medicare payment formula is APA's legislative priority in the wake of health system reform, said APA Director of Government Relations Nicholas Meyers.

Speaking to psychiatrists at last month's Institute on Psychiatric Services in Boston, Meyers said that a 21.3 percent across-the-board reduction in Medicare physician payments is scheduled to go into effect at the end of this month. And he said APA is working with the AMA and with other specialty societies to secure a 13-month postponement of the massive pay cut, from December 1, 2010, to December 31, 2011.

In the meantime, a permanent fix to the payment formula becomes an ever more dire necessity; every month the cut is postponed costs the government $1.3 billion. So the price tag for another 13-month postponement is on the order of $16 billion, Meyers said.

(The sustainable growth rate [SGR] is the component of the Medicare physician payment formula that requires that increases in Medicare volume be compensated for by decreases in physician payment. For seven consecutive years, the Centers for Medicare and Medicaid Services has announced increasingly steep cuts in physician payment, and each year the cuts have been postponed by Congress after fierce lobbying from physician groups.)

But with a likely change of the political landscape—Meyers was speaking three weeks prior to the November 2 elections in which he predicted the Republican takeover of the House of Representatives—it is not impossible that repeal of the SGR could be held hostage to demands from Republicans for repeal of all or parts of the Patient Protection and Affordability Act approved by Congress and signed by President Obama.

It is not a prospect that APA, the AMA, and other physician groups that supported the health reform law relish. “A concern we have is that if the issue [of the SGR] isn't taken care of, it could get tied into a presumed Republican House or Senate takeover, and the health care community is going to be given a very difficult decision,” Meyers warned. “Potentially, Republican lawmakers will say, ‘We'll be glad to get rid of the SGR. What parts of the health reform law are you willing to let go of?’

“APA and the AMA supported [the health reform law],” he continued, “and that is a debate we don't want to get into. It puts health care practitioners between their own economic interests—which can't be discounted—and the interests of patients.”

On the plus side of a GOP takeover of Congress, Meyers noted that Republicans are much less likely to support regulatory policies that physicians perceive as intrusive and will be more likely to promote medical malpractice reform.

But the problem of the Medicare payment formula looms as something close to a national emergency. Meyers noted that APA's Office of Healthcare Systems and Financing has estimated that for psychiatrists, the 21.3 percent across-the-board cut in payments would mean a reduction on the order of $20 per service per CPT code.

Meyers said the impending reimbursement cut will disproportionately affect providers of “cognitive services”—including psychiatrists—because such services are defined by time and hence can't be compensated for by increasing the volume of services.

“On one hand,” Meyers said, “you have health care reform that expands access to treatment, and on the other hand, you have reductions in physician payment on the order of $20 per service that aren't going to help anyone get access, because I suspect our members will be reluctant to maintain or expand the proportion of Medicare patients they treat.”