Monday, February 21, 2011

White House budget delays for 2 years cuts to physician payments


The White House FY 2012 Budget protects doctors from steep cuts in their Medicare payments.  The WH budget delays a scheduled 25 percent cut in the Sustainable Growth Rate, Medicare's physician payment formula that was slated to go into effect in 2012.  To cover the cost of shielding physician reimbursements from cuts for two years, the White House says it plans to squeeze $62 billion in savings out of Medicare and Medicaid payments to hospitals and doctors by the expanded use of generic drugs in federal health programs.  How many times have you heard government officials say they can save money by "squeezing" savings out of a program.  Just doesn't happen.  So much for bending the Medicare cost curve down.  

Stay tuned to see how effective the interest groups are in protecting high rates for docs given the current Republican-dominated House.  It will be fun to watch the fight between the docs and Big PhRMA to see who gets to push the Medicare cost curve up.  But stepping in to play the good guy will be GPhA, the trade association for the generic drug industry.  I bet the house the docs win this battle. 

Click here for a link to the New York Times story.

Click here for a link to the Wall Street Journal story.

Click here for a link to the American Medical News story.

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