A report was recently released by the Congressional Budget Office (CBO) that included three options for Congress to consider as ways to reverse the proposed 5.1 percent physician payment cuts. In the report, CBO questioned the validity of decreasing future payment rates to recoup for past spending exceeding the Sustainable Growth Rate (SGR) target. Each of the three proposed options would increase payments for physician services, which in turn, would increase beneficiary Part B premiums.
Increase payment rates by one percent in 2007, but do not treat the update as a change in law or regulation. According to CBO, this would cause future payments to be lower than they otherwise would have been. The cost would be $13 billion from 2007 to 2011 and spending per beneficiary would be five percent lower in 2016 than under current law.
Increase payment rates by one percent in 2007, and treat the update as a change in law or regulation. The cost would be $13 billion over five years, and $31 billion from 2007 to 2016. Spending per beneficiary would be five percent higher than under current law.
Allow payment rates to increase by the amount of medical inflation. This would replace the current system completely, and average physician payment would increase between 2 and 3 percent annually. The cost would be $58 billion from 2007 to 2011 and $218 billion from 2007 to 2016.
