The agency that runs Medicare today suggested making an obscure accounting change that could make it easier for Congress to change how Medicare pays doctors. The issue goes back to a law passed in the 1990s that was supposed to ensure that the amount Medicare paid doctors for each beneficiary grew no faster than the overall economy. That didn’t happen. (The law created something known as the “ sustainable growth rate ,” or SGR, in Washington jargon). So now there are two different worlds. There’s the official world, in which doctors are scheduled to get a 21.5% pay cut from Medicare next year under SGR. And then there’s the real world, where Congress will intervene at the last minute to block the pay cut, as it’s done time and again in recent years. There have been calls for Congress to fix the situation, but doing so would wreak budgetary havoc: It would require admitting that payments to physicians are way higher than the government officially expected. Most of the money that Medicare pays physicians is for doctor visits, medical procedures and the like. But Medicare also pays physicians directly for drugs that are administered at doctors’ offices. Today, the agency

that runs Medicare said it wanted to move the payments for those drugs out of the bucket of money allotted to physician payments, and into a different bucket. The AMA has been pushing for this shift for years, because the cost of physician-administered drugs (which include expensive new cancer drugs, for example) has risen faster than the cost of doctors’ services. But beyond making the a powerful lobby happy, the shift could make it politically easier for Congress to wade in, get rid of SGR and replace it with a new system, as many have called for. If those drug costs are no longer included in the overall cost of payments to physicians, then Medicare’s total cost of paying physicians could fall by $87.5 billion over the next decade, according to a CBO estimate cited today by The Hill . That would make any fix to SGR a bit easier to swallow — even if didn’t reduce Medicare’s overall spending. For more on proposed changes, read the press release out from the feds today, or the entire proposal published in the Federal Register .

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Medicare May Shuffle the Deck on Doctor Payments