Exit the Super Committee

by Matt Farber, Director of Provider Economics and Public Policy, ACCC

OK, now what?

The Super Committee has failed. Congress was unable to come together to enact change, and the cuts to the Medicare program that the committee had been discussing are no longer being discussed. So, what does that all mean for community oncology?

Unfortunately, there are many cuts still on the horizon that will affect the cancer community. First and most time sensitive, is the SGR (sustainable growth-rate Medicare payment) formula. If Congress does not act by the end of the year, physicians will face a 27 percent reduction to the conversion factor. Many physicians have said that if this cut were to remain on the books, they would be forced to stop seeing or to curtail their Medicare patients. Congress for the most part is against these cuts, and they support fixing the program, at least in the short term. The problem, as with other issues facing Congress right now, is the cost. The cost to patch the SGR formula for a year is $22 billion. The cost to fix it outright is $300 billion over 10 years. Both parties in Congress have yet to announce how they would offset the cost of a one- or two-year fix, but it can and should be assumed that they will look to the Medicare program for possible offsets. In other words, in order to stop cuts to the Medicare program, they will cut the Medicare program. The cuts to the ASP+ number that the Association of Community Cancer Centers (ACCC) and others in the advocacy community have been fighting in the Super Committee? They may very well be back on the table for SGR.

And back to the Super Committee. It failed; so what? Well, as part of the law Congress passed in August of this year, if the Super Committee could not reach an agreement by Thanksgiving, thus not allowing Congress to vote on a package by the end of December, then an automatic trigger would go into effect. The trigger will automatically cut spending from all government agencies, with some facing upwards of 5 percent reductions. Medicare and Defense spending are included in the cuts, but these cuts are capped. Medicare, for example, will be cut by 2 percent. And, these cuts will go into effect on Jan. 1, 2013.

So, you may be saying to yourself, “2 percent does not seem so bad.” For some providers, that may be true. But when you look into what a 2 percent cut means, the reality is harsh. The 2 percent cut is not just off of the conversation factor, or just off of drugs; it is off the entire Medicare spend. Therefore, everything you bill Medicare for, from drugs to administration to evaluation and management to diagnostics, will be reduced.

But not so fast. Some members of Congress are already talking about passing a new law that would halt the trigger from taking effect in 2013. 2012 is an election year and cuts to Medicare, Defense, agriculture subsidies, and clean energy subsidies, for example, may be tough issues to run on for many members of Congress. The President has already said that he would veto any bill passed that would halt the trigger, so the road will be difficult.

So, getting back to the original question, “Now what?” The oncology community needs to remain engaged with their members of Congress. Let them know why they need to fix the SGR long term. Let them know what the 27 percent reduction would mean to you and your patients. And also let them know not to cut Medicare to save Medicare. Finally, start to look at what a 2 percent across the board reduction to Medicare reimbursements would mean for you as well. That information will be very useful in talking with Congress in the coming months. As always, ACCC will be the voice of the cancer care team and will continue to advocate on your behalf.