Ken PerezThose of us hoping for a permanent repeal of the sustainable growth rate (SGR), a formulaic approach intended to restrain the growth of Medicare spending on physician services, entered 2014 with a sense of optimism that this would be the year. These hopes were fueled by bipartisan and bicameral support of SGR reform proposals that emerged at the end of 2013 and significantly lower estimates by the Congressional Budget Office of the cost of a long-term “doc fix.”

Ultimately, however, fiscal and political realities blocked the passage of permanent SGR reform bills, and Congress settled for yet another short-term patch. On March 27, 2014, the House of Representatives, under a suspension of normal rules, approved via a voice vote H.R. 4302, the Protecting Access to Medicare Act of 2014. The bill provides a patch to the SGR that would avoid a 24.4 percent reduction to Medicare’s Physician Fee Schedule (PFS), effective effect April 1, 2014, replacing the scheduled reduction with a 0.5 percent increase to the PFS through Dec. 31, 2014, and a 0 percent increase for Jan. 1, 2015, through March 31, 2015. Four days later, the Senate approved H.R. 4302 on a bipartisan 64-35 vote, and President Barack Obama signed the bill into law.

In the wake of the passage of this latest SGR patch, House Speaker John Boehner (R-Ohio) and Sen. Harry Reid (D-Nev.) both said that they will continue to work toward a permanent SGR repeal, but the 12-month duration of the new law is an implicit acknowledgement of the unlikelihood of the two political parties coming together to pass another doc fix of any sort during the midterm election campaigning that will take place this summer and fall.

It’s hard to imagine, but the next Congress is likely to be even more ideologically riven, as the Republicans have signaled that they will make the Affordable Care Act the central issue in the upcoming elections, while President Obama and his party seek to defend the cornerstone of his legislative legacy.

It is even harder to imagine Congress passing a broad deficit-reduction plan that incorporates numerous new healthcare reform components that would together fund a permanent doc fix. Thus, this most recent SGR patch might constitute a kicking of the can way down the road, with passage of another one-year fix or possibly a two-year fix in 2015. Permanent SGR reform would then be on the horizon in early 2017 after the 2016 elections, so the specter of having to pay for a portion of future doc fixes will hang like a storm cloud over hospitals until the political environment in Washington, D.C., becomes more conducive to constructive compromise.

Ken Perez is vice president of healthcare policy for Omnicell, Inc., Mountain View, Calif., and a member of HFMA’s Northern California Chapter.

Publication Date: Tuesday, April 15, 2014