Capitol Hill Report: Rep. Schwartz Adds Neurology Pay Increase to SGR Bill

May 4, 2012


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

Academy advocacy efforts have paid off as Rep. Allyson Schwartz (D–PA) has added neurology and other cognitive specialties to a bill she intends to introduce to eliminate the flawed Sustainable Growth Rate (SGR) formula.

Rep. Joe Heck (R-NV) with AAN BrainPAC Chair Anna Hohler, MD and Mike Amery.

The change was made at the request of Reps. Joe Heck, DO (R–NV) and Dan Benishek, MD (R–MI), who have supported our efforts from the beginning and plan to cosponsor the bill with Schwartz.

Capitol Hill Report readers may remember that this issue first arose last fall when Schwartz submitted a framework for an SGR repeal that would increase pay for primary care providers, as defined by the Affordable Care Act, by 2.5 percent each of four years, while increasing all other providers at just 0.5 percent.  This definition leaves out cognitive care providers such as neurology and rheumatology, even if they bill a large percentage of their services under the same evaluation and management codes (E/M) as primary care providers. The Academy sent a letter through the Cognitive Specialty Coalition (CSC) detailing our objections last December.

Since then, the Academy and members of the CSC, including rheumatology and endocrinology, have pounded the halls of Congress, including during our Neurology on the Hill event, with the message that cognitive providers need to be recognized in efforts to improve the practice climate for primary care providers.

The Schwartz/Heck/Benishek legislation is a long way from being enacted into law but the Academy has offered our support and we are hopeful that it will be used as a framework for an SGR repeal before the beginning of the new year. Either way, it is the first time that neurology has been included in the effort to boost E/M payments in an SGR repeal bill.  It sets the precedent for moving forward with reforms that focus on services provided to patients rather the physician specialty designations.

Schwartz/Heck/Benishek Repeals SGR

As pleased as we are that the bill adds neurology, even more important is the complete repeal of the SGR. For the last nine years, physician payments have been threatened on a yearly and sometimes monthly basis. As it stands now, if Congress doesn’t act before January 1, 2013, physician reimbursement under Medicare will be cut by 30 percent across the board.

The cost to repeal the SGR is a staggering $300 billion over ten years. Schwartz/Heck/Benishek pays this by using Overseas Contingency Operation (OCO) funds. These are funds that the Congressional Budget Office has anticipated will be used in Iraq and Afghanistan for the next ten years. Because of troop draw downs, the CBO has overestimated the amount that will be spent, making these funds available compared to last year’s budget.

Does this sound like a gimmick? Well, it is. But many argue that the SGR is also a gimmick that never can be realistically paid. No one expects Congress to approve a 30 percent Medicare cut knowing the reality of the consequences that would follow. You can read the frame for the legislation here.

Congress Must Act to Avoid a Train Wreck
These OCO funds will disappear as soon as the CBO resets the baseline based on the past year’s spending. The overestimation will be fixed and Congress won’t be able to take advantage of it after January 1, 2013, which is coincidently the same day that the SGR cuts go into effect.

It is also the same date that “sequestration” takes place due to the failed Super Committee budget reduction effort late last year and the Bush tax cuts expire.

We are headed for a major train wreck and my bet is Congress takes the OCO gimmick and runs with it.  Our job is to get it used for SGR. There is a congressional effort as well, as seen in this letter of support signed by 77 House members.

But What If They Don’t?

I was talking with a member of the Democratic Caucus about all of these issues and he posed the question, “What if we don’t do anything?” It is an interesting question because of two automatic results: implementation of sequestration and the expiration of the Bush tax cuts.

Sequestration makes significant cuts to the military and to health providers that will save $1 trillion over ten years. Expiration of the Bush tax cuts brings in $4 trillion for a total of $5 trillion in revenues if Congress does nothing, which it is pretty good at.

These revenues could be used to permanently fix the SGR and the Alternative Minimum Tax problems and still have plenty left for adding back to the military, solving some other problems and providing some deficit reduction.

Members of Congress could claim they tried to prevent the cuts but just couldn’t get their colleagues to agree and they would have some political cover.  There are serious questions as to whether these “extra funds” could be used to offset the costs of problems like the SGR, but it is a very interesting scenario I thought.

Rep. Jason Altmire Loses Primary

I promised the results of the member vs. member primary in western Pennsylvania in the last Capitol Hill Report. Unfortunately, Rep. Jason Altmire (D) lost to Rep. Mark Critz (D) 51 percent to 49 percent (31,834 votes to 30,231). This was a very close loss for Altmire, who had been very supportive of neurology and had received support from the AAN’s political action committee BrainPAC. He will be missed.