July 2010




In My Opinion

Is SGR repeal really the priority?

David F. Chang, M.D.


The U.S. government is effectively bankrupt and cannot possibly fund the current Medicare system indefinitely ...


“The legitimate objective of government is to do for people what needs to be done, but which they cannot by individual effort, do at all, or do so well, for themselves.” Abraham Lincoln

It took most of June to retroactively reverse the 21% drop in Medicare fees, and with each postponement, the next scheduled cut grows even larger. Regrettably, we appear no closer to a permanent SGR repeal, which has been such a strong and unifying priority of organized medicine for so long. The annual stop gap legislation forestalling SGR mandated cuts has been Congress’ acknowledgement that this is an unfair and flawed method of controlling rising Medicare costs. That this deteriorated to a month-to-month exercise in 2010 has us all fed up. However, the failure to legislate a permanent SGR repeal has occurred against the backdrop of this troubling reality—the U.S. government is effectively bankrupt and cannot possibly fund the current Medicare system indefinitely. It is only through continued borrowing that we keep delaying a precipitous drop in physician fees from one year to the next.

In many respects, I think that organized medicine has been overly fixated on the SGR. The recent healthcare reform package created an Independent Payment Advisory Board (IPAB) which will be appointed, empowered, and charged with meeting lower Medicare expenditure targets. Therefore, even if the SGR had been repealed this year, the newly legislated IPAB would still be able to abruptly cut M.D. fees if the Medicare balance sheet continued to deteriorate in the years ahead. The strategy of decrying unfair fee cuts has neither garnered public sympathy nor compelled Congress to permanently fix the SGR. While our disgruntled and disillusioned medical community laments yet another short-term band-aid, a June 2 Washington Post article lambasted Congress for spending another $22 billion on a “doctor fix” thereby “protecting high-income docs (instead of) economically struggling patients”. Recognizing that the present Medicare system is no longer economically solvent, and that our ability to sustain it with government borrowing cannot continue indefinitely, I believe that it is time for organized medicine to focus on alternate solutions. Specifically, I believe that we should be making the case for patient shared balance billing.

Congress is saying that in December, it can only afford to pay me 79% of what it does now, but still wants me to provide the same level of care to Medicare patients, without reducing access or quality. In that case, allow me to charge more than a politically mandated, below-market “Medicare” rate (minus an additional 21%) to those patients who still value, want, and can afford access to my services. This could be done by raising the “limiting charge” imposed on non-participating M.D.’s relative to the Medicare allowance. The limiting charge is a federally imposed price control on physician fees, which at current levels means that PAR and NON-PAR M.D.’s receive virtually identical reimbursement. In essence, Medicare beneficiaries would be asked to bear more of the Medicare system shortfall but would still have the protection of government imposed price limits. Viewed politically, physicians would not receive a “raise” if the 2010 limiting charge were to remain frozen while the Medicare reimbursement was cut. Current market rates for refractive cataract services, such as astigmatic keratotomy and premium IOLs, demonstrate just how undervalued cataract surgery is according to Medicare’s fee schedule. In this context, a $900 M.D. fee for cataract surgery would remain an exceptional bargain, even if the Medicare allowance dropped to $500. If patients were paying more of their bill, I suspect that they would take a more active role in medical decision making, such as the necessity of an expensive diagnostic test. They might become more motivated to focus on preventive medicine. Financially strapped patients could select a “participating” M.D. with the assurance of Medicare assigned benefits. However, I believe that most M.D.’s switching to Non-PAR status would continue to provide many essential services to the indigent at the lower Medicare assigned rate on an individual case basis. They would feel good about the fact that they are able to voluntarily help the unfortunate, and those needy patients would come to recognize and appreciate this as goodwill and generosity, instead of something that they are entitled to. This is far different than having the IPAB impose a 33% cut on everything you do because they have concluded that you are wasteful, inefficient, and performing unnecessary services. On a separate but related issue, it should be legal, not illegal, for seniors to pay their own money for certain discretionary upgrades above and beyond the basic services or devices—much as they now do for refractive IOLs. Without adding to the federal deficit, the premium IOL channel has provided patients with additional and improved options, preserved industry incentives to advance technology, and led to ophthalmologists spending more, rather than less chair time with cataract patients in the face of declining Medicare reimbursement.

The political fear that balance billing would open the floodgates to widespread physician exploitation of medically unsophisticated patients appears to have been unfounded. Presbyopia correcting IOL adoption rates have remained below 6–8% during the 5 years since the CMS ruling, Why should it be illegal for someone to spend their own money to have their cataract surgery performed with a femtosecond laser? Shouldn’t they at least be afforded the option? Industry and organized medicine should use the premium IOL example to illustrate why patients should be outraged that they have no right to spend their own money for other discretionary medical upgrades. Seniors and the AARP must understand that balance billing is neither price gouging by greedy physicians, nor a malevolent effort to take away entitled benefits. Freezing rather than cutting the limiting charge still fixes M.D. fees at the historically low (inflation-adjusted) levels of the past decade. Rather, this is the best way to preserve patient choice, access, and the quality of medical care which cannot otherwise be sustained under our current crumbling system. This is a better alternative to having a government subsidized, bargain basement insurance plan for seniors, but where no doctor is willing to see you (e.g. Medicaid in many states). It is a better alternative to a 100% government funded single payer system where our aging baby boomer generation will create an unimaginable need to ration services (e.g., 20/70 threshold and waiting lists for cataract surgery). Once upon a time in 1965, Congress (not physicians or hospitals) made a well-intentioned, but ill advised promise to the American public that it can no longer keep—that we would provide all seniors with the highest level of care for the same low, subsidized cost, whereby no one should have to pay more than anyone else. Isn’t it time that we acknowledge that with our aging demographics and 4+ decades of advances in medical technology—this is no longer realistic, no longer affordable, and therefore no longer desirable. Repealing the SGR isn’t healthcare reform and won’t solve the fundamental problems. Polls show that the majority of Americans are worried about the US government mortgaging the financial future of their children and grandchildren. Sustaining the current Medicare system would require more of the same. Most representatives in Congress simply do not have the courage to talk about reducing Medicare benefits to seniors. However, I would hope that many others would realize that patient shared balance billing is a less painful compromise, and ultimately a better path than the alternatives.


David F Chang is a member of the ASCRS executive committee, and will serve as president in 2012. He states that he does have a financial interest in this subject.

Is SGR repeal really the priority? Is SGR repeal really the priority?
Ophthalmology News - EyeWorld Magazine
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283 110
True, 7