Rangel: Health Plan Must Overhaul Medicare Reimbursement Rates for Doctors

Ways and Means Chairman Charlie Rangel (D-N.Y.) said today that pending health care reform legislation must include language overhauling Medicare reimbursement rates in order to ensure that doctors back the bill.

"If we don't get doctors on board, we're in trouble," Rangel told reporters.

Rangel, along with Reps. Henry Waxman (D-Calif.) and George Miller (D-Calif.), chairmen of the Energy and Commerce and Education and Labor committees, respectively, earlier today outlined their proposal for overhauling the nation's health care system and providing medical coverage to the 50 million Americans who now lack it. Their plan would alter doctors' Medicare reimbursement rates, known as the Sustainable Growth Rate, to keep Congress from having to annually pass legislation to keep them from being cut.

Many health care experts have said doctors would only be willing to accept a government-backed health insurance option - a key feature of the Democratic health overhaul - if it's coupled with changes in the reimbursement rates.

Backers of the bill want Medicare doctors to participate in the public health plan initially to get the plan up and running, but doctors have been reluctant to do so, a Medicare advocate said. However, a Rangel aide, has denied that doctors are opposed to participating in the government-run health plan.

Meanwhile, the Senate's initial health reform proposal does not address the reimbursement rates, but it could still emerge in that chamber's bill, said an aide to Senate Health, Education, Labor and Pensions Chairman Edward Kennedy (D-Mass.). The issue will be discussed during bipartisan HELP meetings over the next few days, aides said.

Some Republicans are skeptical of how Democrats will pay for the SGR reform.

While most Members want to change the reimbursement rate formula to avoid annual fixes, the question is how Democrats would offset the $200 billion cost of doing so over 10 years, according to a senior aide to HELP ranking member Mike Enzi (R-Wyo.). The bill is already estimated to cost more than $1 trillion, the aide added.

Today, President Barack Obama proposed that an SGR fix be exempt from pay-as-you-go budget requirements. PAYGO is a budgetary rule that requires all increases in spending be offset by cuts elsewhere.

The American Medical Association agreed that should be the case. "President Obama's call today to exempt changes in Medicare physician payments from the PAYGO requirements shows that he recognizes that current government budget numbers do not reflect reality," AMA Board Chairman Joseph Heyman said.

The AMA has long sought a change to the SGR. "Reform of the flawed Medicare physician payment system is crucial to achieve the improvements to the health system we are all working for this year," Heyman said.

While doctors avoided a 10 percent cut in the SGR with the passage of a temporary fix last year, they stand to face a 21 percent reduction when that short-term patch runs out in 2010. A new temporary patch would cost $20 billion annually.

There are no specific details yet about how the SGR would be changed under the House bill, but Rep. Pete Stark (D-Calif.), the chairman of the Ways and Means Subcommittee on Health, has previously proposed setting a new baseline for reimbursement rates. The AMA has previously endorsed that plan.

Beyond the AMA, several other groups, including the National Medical Association, which represents minority physicians, and the public interest group Consumers Union, are supporting Rangel's move to reform the program.

The SGR "needs to be fixed now," NMA Executive Director Mohammad Akhter said. Pending cuts will keep physicians from seeing Medicare patients, he added.

William Vaughan, a health policy analyst with the Consumers Union, agreed that health care must include the SGR.

"Congress keeps kicking this can down the road, and a huge reform bill, with improved ways to pay doctors and encourage better care, is the place to do it," Vaughan said. "In general, each year it gets more expensive to fix, so economically, this is the time to try."