Congress continues to work on legislation to fix the Medicare Sustainable Growth Rate (SGR) physician payment formula. In late December, Congress passed the Temporary Payroll Tax Cut Continuation Act of 2011, which extended Medicare physician rates, current payroll tax rates, and unemployment insurance benefits through February 29, 2012. The legislation temporarily avoided a 27% Medicare reimbursement cut to physicians under the SGR formula. Congressional leaders have created a Conference Committee to negotiate a later bill that would extend these programs. GNYHA is deeply concerned that the Conference Committee is considering hospital payment cuts to pay for the Medicare SGR fix.

During the Conference Committee’s several public meetings over the past few weeks, House Ways & Means Chairman Dave Camp (R-MI) was appointed chairman of the 20-member panel, and Senate Finance Chairman Max Baucus (D-MT) was appointed vice chairman. While there has been a great deal of agreement among the Conference Committee members that the Medicare SGR should have a long term fix, there has been little discussion about potential offsets to pay for it.

GNYHA has been actively lobbying to ensure that damaging hospital cuts are not included in any proposal the Conference Committee considers. On January 17, GNYHA President Kenneth E. Raske sent a letter to every member of the New York Congressional delegation stating that while GNYHA supports extending the Medicare SGR, we strongly oppose paying for it by cutting reimbursement to hospitals. The letter also stressed the dramatic impact these proposed cuts would have on New York’s hospitals and the patients they serve, and requested that delegation members weigh in directly with Congressional leadership as forcefully as possible. GNYHA has also had ongoing discussions with Representatives Nan Hayworth (R-NY) and Tom Reed (R-NY), who are Conference Committee members.

Senator Charles Schumer (D-NY) recently held a press conference in which he discussed the Conference Committee’s work and emphasized the severe impact that Medicare hospital outpatient department evaluation and management (E/M) cuts would have on hospitals and health care access across New York State. The Conference Committee has seriously considered these Medicare E/M cuts, which would severely harm New York hospitals. In a press release, Senator Schumer urged the Conference Committee members to “remove the provision that could be devastating to New York City hospitals.”

In addition, on February 1 Congressmen Joseph Crowley (D-NY) and Dan Benishek (R-MI) began circulating a letter to members of the Conference Committee requesting that it consider a permanent repeal of the SGR formula, and offset the full cost of the repeal with unused Overseas Contingency Operations funds. GNYHA supports this letter and has asked members of the New York House Congressional delegation to sign on to it.

In the coming days and weeks GNYHA will continue to work with members of the New York delegation, the Conference Committee, and others to ensure that hospital cuts are not included in the final agreement.

For questions, please contact David Rich (rich@gnyha.org) or Jon Cooper (jcooper@gnyha.org).