Medicare Compliance & Reimbursement

Why another year of better pay could signal bad news for the long haul

To avoid a looming 5 percent cut to physicians' payments, Congress will have to pass another temporary increase this year.

But if Congress keeps passing short-term fixes every year instead of repairing the broken Sustainable Growth Rate system, it creates its own problems, a Senate Republican aide admits. Problems include uncertainty for doctors, but also uncertainty for government actuaries (who found in 2004, for example, that the previous year's one-time doctor-pay fix forced them to raise beneficiaries' Part B premiums by an unprecedented amount).

So it makes more sense for lawmakers to enact a new method of setting annual physician updates that could produce predictable, accurate payments. But that won't happen this year.

For one thing, there's not enough time, the Senate Republican aide says. Because Congress will attempt to cut the federal budget deficit in 2005, any substantive Medicare payment legislation should get committee approval by June. The physician-fee issue is far too contentious and unclear to meet that timetable, said the staffer. "I don't presume [that at this point] there is any consensus about what the solution is."