December 17, 2010

President Signs One-Year SGR Fix

As expected, President Obama signed legislation this week that provides a one-year fix to the Medicare sustainable growth rate (SGR) factor, avoiding the 24.9 percent cut in Medicare physician payments. The legislation provides a zero percent increase in Medicare physician payments for 2011. The one-year fix is estimated to cost $14.9 billion.

The American Thoracic Society is pleased that our efforts, combined with the efforts of the entire physician community, were successful in getting Congress to prevent the devastating cuts in Medicare physician payment. The legislation marks the most recent in a long series of legislative acts that have delayed, but not fixed the SGR problem. Real work is yet to be done. What is needed is for Congress and the Administration to agree on a permanent repeal of the SGR formula and replace it with a mechanism that provides predictable and sustainable updates in Medicare physician payments. This will not be easy or cheap. It is estimated a permanent repeal of the SGR formula will cost between $250 and $300 billion over 10 years. With the new Congress likely to focus on reducing federal spending, finding the political will to provide $300 billion to the Medicare program will be difficult.

BUDGET

Senate Abandons Omnibus FY2011 Appropriations Bill, Delays Final 2011 Funding Until New Congress

Last night, the Senate abandoned attempts to pass the FY2011 Omnibus Appropriations bill to provide funding for federal programs for the remainder of fiscal year 2011. The bill failed after several Republican Senators withdrew their support for the bill due to their opposition to the number of earmarks for special projects included in the Omnibus Appropriations Bill. Ironically, many of the earmarks in the bill were specifically requested by the very Senators who now oppose earmarks

While much of political posturing in Congress surrounds earmarks, federal funding for key programs remains in limbo. The omnibus had included a $750 million or 2.4 percent funding increase for the NIH in 2011 and increases for programs like CDC, EPA and VA research.

Congress will now pass a temporary continuing resolution within the next few days (CR), freezing government programs at FY2010 spending levels and deferring final FY2011 spending levels until the new 112th Congress. The incoming House Republican leadership has vowed to cut FY2011 spending bills back to FY2008 levels. If the House leadership fulfills its promise, this will likely have dire consequences for federal research funding. The ATS Washington Office will alert members when advocacy will be needed on health research and services funding.