Noteworthy News

Price Tag on Medicare Doc Fix Falls

The major obstacle to solving the perennial problem of the Medicare “doc fix” has been the high cost of such a solution.  The conventional wisdom has been that a solution would cost hundreds of billions of dollars – additional federal spending that would need to be offset through a combination of cuts in other areas or new revenue.

Now comes word that the cost of addressing the sustainable growth rate problem – the formula that consistently calls for reducing Medicare payments to physicians – may not be as great as many feared.

According to a new analysis by the Congressional Budget Office (CBO), the cost of solving the Medicare doc fix problem for the next ten years could be as little as $138 billion – a considerable sum but less than half of the $300 billion price tag that the CBO had previously affixed to such a solution.

A workable Medicare doc fix is important to urban safety-net hospitals because so many of those hospitals now own physician practices.  At the same time, however, the money to pay for such a solution cannot come from other Medicare payments that are essential to those hospitals.

Read more about the problem, the CBO analysis, why the cost of a solution has come down, and what a “solution” actually means in this CQ HealthBeat articleStock Photo presented by the Commonwealth Fund.

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