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We've got a permanent doc fix. It's all about the sustainable growth rate. Confused? We'll help. This is Healthcare Triage News.

For those of you who want to read more, here's a nice summary at Vox: http://www.vox.com/2015/3/17/8232071/medicare-doc-fix-sgr

John Green -- Executive Producer
Stan Muller -- Director, Producer
Aaron Carroll -- Writer
Mark Olsen -- Graphics

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Permanent doc fix. It's all about the Sustainable Growth Rate. Confused? We'll help. This is Healthcare Triage News.

[intro plays]

Basically, back in the long ago of the 1990s, Congress tried to slow the rising cost of Medicare by pegging how much they would pay doctors to a formula. They called it the Sustainable Growth Rate, or the SGR. But the formula was created during a time of strangely low growth in physician payments. Therefore, when inflation kicked back to normal, doctors quickly realized that Medicare and the SGR were trying to squeeze them. To improve this, Congress didn't fix the SGR formula, or even repeal it. They passed what came to be known as a "doc fix," or a short term law that tells Medicare to ignore the SGR for a period of time. It's a patch.

Each time the doc fix is about to expire, the AMA and doctors start to lose their minds. This is because so much time has passed since the SGR formula started, that if the actual SGR kicked in tomorrow, doctor reimbursements would drop more than 20% overnight. That would likely make many doctors start to refuse Medicare patients. That would make the elderly very angry. And that would make politicians miserable.

Pretty much nobody in Washington likes the SGR, but they've been unable to fix it for one big reason: money. Allowing the SGR to stay on the books makes the budgets look better, because politicians can always say it's current law in future budget projections. Each time they pass a patch, for six months or for a year, it costs them money. Billions. And no one wants to take credit for the spending. For a long time, many have sought a permanent doc fix, but estimates are that it would be even more expensive than the short term fixes.

But there's always been hope. For the first time in a long time, the House of Representatives has passed a bill. The Medicare Access and CHIP Reauthorization Act, passed by 212 Republicans and 180 Democrats, which is a frickin' bipartisan miracle these days, would not only fix the SGR forever, but it would also reauthorize the CHIP program for two years.

There have been, like, seventeen doc fixes since the early 2000s and I think it's always been ridiculous, and it's a waste of time, but I've always been skeptical that they'd ever permanently fix this. The bill to do so will cost $214 billion, now some of that is CHIP and other spending, but $175 billion of it is for doctors to get a slight 0.5% raise each year through 2019, and then to hold things steady until 2024. Only some of it is paid for, though, with spending cuts and such elsewhere. These include some cuts to reimbursement for post-acute care, and some cuts for payments to hospitals. They're also going to raise deductibles for some Medigap policies and premiums for wealthier seniors, but that's sort of chump change. The bill's going to add more than $140 billion to the federal deficit over the next ten years, unless other spending cuts or taxes are enacted. That was a hard pill for many Senators to swallow. There are also some Senators who wanted to call for a longer CHIP reauthorization, like four years.

Many of the health policy wonks I run with were as optimistic as I've ever seen them about getting this done. They really thought that this time we'd see a permanent doc fix. Me? I'd seen this dance before. I've been burned too many times by promising moves forward, killed by politics. I was wrong! On Tuesday night, the Senate passed the House bill, 92 to 8. Ninety two to eight! That's insane! Look, I was so skeptical that this would pass, I had to rewrite the script for this episode, 'cause I was still predicting doom, even yesterday. I also tweeted this. By the time you're reading this, President Obama will have signed the bill into law. The SGR will be gone forever. No more doc fixes. Physicians all over the US rejoice.

[outro music]