As Another SGR Patch Deadline Approaches, Is a Horrifying Sequel in the Works? | Gabriel Perna | Healthcare Blogs Skip to content Skip to navigation

As Another SGR Patch Deadline Approaches, Is a Horrifying Sequel in the Works?

March 12, 2015
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The annual temporary Medicare “doc fix” is the “Saw” of healthcare policy measures and the latest sequel could be another gruesome tale for healthcare IT leaders.

Let me explain. “Saw” was a horror movie that came out in the mid-aughts. When I was a freshman in college, it was all the rage. Everyone was talking about the mind-blowing finish. The movie did incredibly well at the box office, grossing more than $100 million off a $1.3 million budget.

Because Hollywood is a business first and foremost, the success of that movie spurned a sequel. Some sequels are necessary. Most are not. Some are actually pretty good, even better than the original. Most are not. It’s usually just a money grab.

Thus, “Saw II” came out one year later and despite not being nearly as good as the original, it also did really well. So guess what? “Saw III” was born one year later. Then “Saw IV”, V, VI and “Saw 3D.” Seven movies in seven years, six sequels—each (from what I’ve heard—I had to stop supporting them after Saw III) worse than the previous one.

Every time a new Saw movie came out, most people would roll their eyes and express their disbelief that this was still happening. Despite the cynicism, it kept happening.  In fact, I have read that it could happen again, in 2016. Why does it keep happening? The answer is simple. With a low budget and a high gross, the franchise makes a profit for its studio. It doesn’t matter that the concept of the movie has been played out, ripped off, and done to death. It’s all about the almighty dollar.

This takes me to the Sustainable Growth Rate (SGR), Medicare’s formula for reimbursing doctors, which will likely be temporarily fixed when it expires at the end of March. Year in, year out, we get a temporary fix that prevents a 21.2 percent cut in payments. Year in, year out, we get a promise that a permanent fix is on the horizon. This upcoming one would be version 18 of the temporary fix.

Why do these temporary fixes keep happening? The answer, of course, comes down to money. As explained in a Wall Street Journal article, Congressional officials cannot agree on how to pay for a permanent fix. Should there be cuts to Medicare? An increased budget deficit? Who knows? So let’s just delay this “one more time” and get back to it in a few months or a year.

Why are measures like the ICD-10 transition sneakily crafted into this legislation, as was the case last year? Again, it’s money…and politics. When lobbyists know something is guaranteed to pass, they use their “influence” to get something they oppose embedded. Certain medical groups have a ton of influence, which explains why ICD-10 gets targeted. This isn't new. We've seen this movie before.

If a temporary fix is up for a vote again, I am guessing ICD-10 will be targeted. It was already targeted a few months back for a different temporary measure and was spared. The effort will happen again.

As I said, the ICD-10 debate isn’t as one sided as we saw during the House of Representatives’ Energy and Commerce Committee’s Subcommittee on Health’s hearing. Just last week, nearly 100 physician groups representing state and specialty medical societies wrote a letter the Centers for Medicare & Medicaid Services (CMS) regarding ICD-10 concerns that the groups say the agency has not addressed. 

I really hope ICD-10 gets spared. There are valid concerns over the transition still unanswered but I think the industry is ready for it to happen. Studies have shown that providers are optimistic, CMS testing is going fairly well, and costs aren’t as bad as previously reported.

I also hope a permanent fix for the SGR is reached. Doing something 18 times in 13 years is embarrassing. It’s time to figure out a long-term solution for reimbursement of physicians.

Mostly though, I hope we don’t have to keep doing this. I have my doubts. The is a reason most healthcare policy observers are so familiar with this story that they could probably tell it backwards in their sleep, just like movie nerds could probably predict what will happen in the next Saw movie. It’s because it keeps happening.

Please feel free to respond in the comment section below or on Twitter by following me at @GabrielSPerna

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