What’s The Super Committee Up To?

The clock is ticking on the charge to the Joint Select Committee on Debt Reduction, otherwise known as the “supercommittee,” to submit a proposal to reduce the national debt by $1.2 trillion by Thanksgiving Day, about seven weeks from now. Naturally, everyone has an opinion.

It’s no surprise that physicians organizations have urged the committee to repeal the sustainable growth rate (SGR),the statutory formula to calculate payments to doctors. The SGR would have required a pa cut each year since 2000. Each year since 2002, the SGR would have cut payments for physician services. Although Congress allowed the cut to occur in 2002, every year since then it has passed legislation to avoid it. Each time, the legislative fix applied only for a limited period; there was no change to the formula itself. As a result, the SGR cuts grow more severe, so that Congress has even more reason to avoid it the next year. In a letter to the supercommittee, organizations representing thousands of doctors  pointed to recommendations from the Commission on Fiscal Responsibility and Reform as well as liberal and conservative organizations.

Also under consideration is reducing healthcare costs by consolidating and coordinating services to dual eligibles, individuals who are eligible for both Medicare and Medicaid. Expenditures for this group amount to $300 billion per year, and they comprise a greater proportion of expenses for each program than the number of enrollees. Fifteen percent of Medicaid beneficiaries are dual eligibles, but  services for them amount to 39 percent of Medicaid spending. These beneficiaries often have multiple, chronic conditions and because Medicare and Medicaid cover different services, patients may see different professionals who aren’t always aware of the patient’s other conditions and medications.

Enrolling these patients in managed care organizations, as proposed, could improve coordination and reduce costs. The National Association of State Medicaid Directors urges the committee to adopt the idea. The law currently protects Medicare beneficiaries from being forced into Medicaid managed care, so states can do so only with CMS approval of a waiver unless Congress amends the law. Many people resist the idea of mandatory managed care and are particularly opposed to having their care managed by a for-profit corporation.

What about raising taxes? The parties ideological positions on taxes are completely at odds. Their perceptions of reality, that is, their assumptions about human nature and how economies work are so different that it will be very difficult to find common ground.  For example, one side argues that cutting taxes will spur job creation and result in an increase in revenue. The other side contends that special tax treatment for certain businesses encourages them to send jobs overseas, and that it’s unfair to tax wages at a higher rate than other investment-related  income.

There also is disagreement about the baseline, that is, the assumptions about the tax law and the revenue stream from which reductions would be counted. For example, the SGR is part of current law, but Congress has set it aside each year. The 2001 tax cuts are scheduled to expire, but they have been extended every time. Should Congress assume that the cuts will expire? It appears there may be some agreement on the general proposition that the tax code should be reformed. Can the supercommittee accomplish that feat in less than two months? It doesn’t seem likely.   The tax code and the effects of proposed changes are difficult to understand to start with. Adding highly political and emotionally charged questions to the mix makes the job even more difficult.

Replacing the SGR is less charged but still will require thoughtful consideration of technical issues and the place of physician reimbursement in the overall scheme of Medicare reimbursement. It’s not a problem that can be explained in a pithy sound bite. There is also the argument that if it could be resolved by a committee under a tight deadline, Congress would probably have done so already.

In the meantime, the members of the supercommittee are not saying much about their progress.  Maybe that’s necessary as they try to negotiate difficult issues. As of this writing, no additional hearings or public meetings appear on the committee’s online calendar.