Members of the Massachusetts congerssional delegation this week
united in a bipartisan letter to support the use of unused defense
funds to repeal the flawed Medicare physician payment formula,
known as the Sustainable Growth Rate. They wrote, "A permanent
solution to the SGR dilemma is long overdue."
Here is the text of the letter in full:
February 7, 2012
The Honorable Dave
Camp
Chairman, House Committee on Ways and Means
1102 Longworth House Office Building
Washington, DC 20515
The Honorable Max Baucus
Chairman, Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510
Dear Chairmen Camp and Baucus:
We appreciate your
leadership on the conference committee for H.R. 3630 and look
forward to quick passage of legislation that would provide critical
tax relief for American workers. As the conference committee
considers the payroll tax cut extension and other issues, we
encourage you to include permanent repeal of Medicare's sustainable
growth rate (SGR) formula and offset the cost with savings from
capping a portion of the spending for Overseas Conti ngency
Operations (OCO) below amounts in the Congressional Budget Office
(CBO) baseline.
A permanent solution to the
SGR dilemma is long overdue. Democrats, Republicans, and the
Medicare Payment Advisory Commission (MedPAC) have all recognized
that the formula is inherently flawed because it neither rewards
physicians who restrain growth nor punishes those who prescribe
unnecessary services. Since 2003, Congress has relied on temporary
patches to avert the projected Medicare physician payment cuts.
When previous legislation passed to override the cuts called for by
the SGR, it made the cost of the fix temporarily smaller by calling
for even greater cuts at the end of the budget window. The
accumulated debt associated with this approach has exacerbated the
problem, leading to the artificially large cuts we face today.
CBO currently projects that
the 10-year cost of repealing the SGR and freezing physician
payments at current levels would cost $316 billion. If Congress
passes just a two-year extension, then the cost of full
repeal-including temporary patches-will grow to $385 billion.
According to the American Medical Association, when the cost of
temporary patches is considered, the true cost of a 10-year fix
will grow to nearly $600 billion by 2016. By way of comparison, in
2005, the formula could have been repealed for less than $50
billion. This current dynamic prevents Congress from enacting
reforms that would appropriately align incentives for the delivery
of high quality, cost effective care.
Without action, Medicare
payments to physicians will be cut by nearly 30 percent on March 1.
These cuts come at a time when practice costs continue to rise and
the number of Medicare beneficiaries grows exponentially. According
to the 2011 Medicare Trustees Report, Medicare payment updates for
physicians are 20 percent below the cost of caring for seniors. As
the leading edge of the baby-boom generation enters the program,
the number of Medicare beneficiaries is expected to grow
dramaticall y from 45 billion in 2011 to 58 million in 2020. The
impact of Medicare's funding is multiplied because private payers
often follow the Medicare payment formula.
Full repeal of the flawed
Medicare SGR formula is particularly important to the Massachusetts
economy. One in five workers in Massachusetts is employed in health
care and it supports nearly 15 percent of our state's economy. This
issue directly affects over one million seniors and military
families in Massachusetts, as well as 20,000 physicians and their
114,000 employees, and every health care constituency which depends
on Medicare, including medical device companies, biotech companies
and our hospitals.
We urge you to include full
repeal of the SGR as part of the conference agreement to avert this
draconian cut, bring payment stability to our nation's physicians,
and ensure that seniors have access to needed medical care.
Furthermore, we believe reductions in Overseas Contingency
Operations (OCO) spending present an ideal opportunity to offset
the cost of repealing the SGR.
Thank you for considering
our request and for your important work on the conference
committee.
Sincerely,
John F. Kerry
United States Senator
Scott P. Brown
United States Senator
Edward J. Markey
Member of Congress
Barney Frank
Member of Congress
Richard E. Neal
Member of Congress
John W. Olver
Member of Congress
John F. Tierney
Member of Congress
James P. McGovern
Member of Congress
Stephen F. Lynch
Member of Congress
Niki Tsongas
Member of Congress
William R. Keating
Member of Congress
cc:
The Honorable John Barrasso
The Honorable Xavier Becerra
The Honorable Kevin Brady
The Honorable Benjamin L. Cardin
The Honorable Robert P. Casey, Jr.
The Honorable Mike Crapo
The Honorable Renee Ellmers
The Honorable Nan Hayworth
The Honorable Jon Kyl
The Honorable Sander Levin
The Honorable Tom Price
The Honorable Jack Reed
The Honorable Tom Reed
The Honorable Allyson Schwartz
The Honorable Fred Upton
The Honorable Chris Van Hollen
The Honorable Greg Walden
The Honorable Henry Waxman
