Capitol Hill Report: Is It Real or Just Funny Money?

December 9, 2011


By Mike Amery, Legislative Counsel, Federal Affairs, (202) 506-7468,

SGR Fix Tops List

We are coming down to the wire on the need for a fix to the Medicare Sustainable Growth Rate (SGR) formula. The Super Committee failed to come up with a plan and on January 1, 2012, physician reimbursement under Medicare will be cut 27.4 percent unless Congress acts.

Derek Brandt and I have spoken with many of the top leaders in Congress about the need for SGR fix. We’ve talked personally with Senate Majority Leader Harry Reid (D–NV) as well a Senate Minority Leader Mitch McConnell (R–KY). We also have met with House leadership on both the House Energy and Commerce Committee and the Ways and Means committee.

The message is always the same, "Congress will get something done" but they are struggling to pay for it. The most recent Congressional Budget Office score for a two-year patch is $38 billion.

A particularly interesting take on the problem came in a conversation I had with House Energy and Commerce Health Subcommittee Chair Joseph Pitts (R-PA). He suggested that the fix must be at least two years because a one-year fix means that the issue would come up again at the end of 2012, just after presidential and congressional elections and at a time when several other huge policy decisions such as the expiration of the Bush-era tax cuts must be considered.

Real Money?

Is there a way to eliminate the SGR by just doing an accounting gimmick? That is one of the plans being floated in the Senate by both Majority Leader Reid and Minority Whip John Kyl (R-AZ). Each have said publicly that they would back a plan to use savings generated by the drawdown of the Iraq and Afghanistan wars to pay for a permanent fix of the SGR, wiping all of the years of postponed Medicare payment cuts. Some object, saying the savings are not real, but in reality neither is the SGR. The American Medical Association has put out talking points on this issue. They make a pretty interesting argument for using this "funny money" to permanently eliminate the SGR.

If this plan doesn't move forward, the need for $38 billion for a two-year fix is very real. Another plan being offered by Republicans is to cover the $38 billion cost with "unassigned" funds from the 2010 health reform law. A potential target is $15 billion allocated for preventive-health efforts. House Republicans voted to eliminate the entire fund earlier this year and President Obama proposed cuts to the fund in his most recent deficit-reduction plan, but getting this to pass the Senate might be a very different matter.

Measuring Success

Whether the fix is permanent or temporary, I think it's certain that a significant Medicare payment cut will be averted. This is a testament to the power the physician community has as it lobbies in unison on this one issue. In a time of great fiscal austerity, physicians have not seen significant cuts, which indicate a pretty successful effort in which the AAN is playing a vital role.

Rep. Schwartz Plan Still Pending

The SGR transition legislation proposed by Rep. Allyson Schwartz (D-PA) and discussed in my last Capitol Hill Report still has not been introduced as legislation. Members of the Cognitive Specialty Coalition (CSC) continue to lobby across Capitol Hill in opposition to the section of the Schwartz proposal that would split primary care payments from all other providers. This policy, if enacted, would eventually lead to an 18-percent payment differential between cognitive specialists and primary care for providing evaluation and management services to Medicare beneficiaries.

The CSC sent a letter to Schwartz last week detailing our objections and plans to oppose this section of the bill if legislation is introduced. The AAN has been working fiercely to block efforts to benefit physicians simply for putting out a shingle saying they are primary care providers rather than looking at the care provided to patients. Since October, Derek and I have met with nearly 200 congressional offices objecting to this policy and our efforts truly are making a difference.

Gingrich Interested in Neuroscience

Republican presidential hopeful Newt Gingrich recently visited the University of Iowa's new Aging Mind and Brain Initiative (AMBI). AMBI is directed by AAN member Matthew Rizzo, MD, FAAN, who was a member of the forerunner of the Academy's Government Relations Committee. Rizzo was invited to discuss science and policy issues with Gingrich, who has shown a keen interest in Alzheimer's disease. Rizzo said that Gingrich "expressed high interest in health care research and policy aimed at mitigating effects of Alzheimer's disease and cognitive aging. His 'Apollo Project' plan is to delay AD onset by five years and save $20 trillion by 2050."

Dr. Rizzo was joined by the Head of Iowa's Department of Public Health, Marianette Miller–Meeks, MD.