Permanent End to Doc FIx

April 17, 2015

On April 16, President Obama signed legislation preventing a 21 percent cut to providers who treat Medicare patients. After returning from a two-week recess, Congress set aside partisan differences and passed a long-term solution to provide stability to doctors who accept Medicare.

By a vote of 92-8, the Senate overwhelmingly approved legislation that permanently replaces the formula used to pay providers treating Medicare patients. The House passed its version of the bill by a vote of 392-27 before adjourning for recess.

Because TRICARE reimbursement rates are tied to Medicare’s, this legislation affects TRICARE beneficiaries of all ages.

Providers technically had payments cut by 21 percent on April 1 while Congress was in recess. Since then, the Center for Medicare and Medicaid Services has relied on administrative lag times from when Medicare receives claims to when it actually makes payments to avoid imposing the pay cuts.

The legislation is part of an effort to move away from a fee-for-service model and shift towards a value-based payment system.

The fix changes the Sustainable Growth Rate (SGR) formula, a flawed legislative mechanism used to pay medical providers who see Medicare and TRICARE patients. The SGR was designed to incentivize providers to control medical spending by rewarding physicians when the rate of spending on physician services fell below the growth in gross domestic product (GDP). However, medical inflation consistently outpaced overall inflation, leading to scheduled cuts.

Cuts to reimbursement rates lead to many providers dropping TRICARE and Medicare patients. Fearing a dramatic disruption in access to care for millions of Americans, Congress prevented the cuts 17 times between 2003 and 2015. However, each time Congress delayed action, the amount of scheduled cuts and cost of a permanent fix grew.

Throughout it all, MOAA members sent nearly 1 million messages to their elected officials urging a permanent resolution.

A permanent deal helps sustain Medicare and TRICARE for Life benefits.

“MOAA members can be proud that they did their part to help millions of Americans keep their health providers. With over 1 million messages sent to Congress, one thing is certain: MOAA members represent a powerful voting bloc,” said MOAA’s Deputy Director for Government Relations, Capt. Kathy Beasley, USN (Ret).

MOAA thanks Congress for coming up with a bipartisan solution to the doc fix ordeal.