The Medicare Sustainable Growth Rate (SGR) formula on which Medicare reimbursement rates are based is broken. The SGR has been forecasting negative updates into the future. Unless an extension is made, Medicare payments to physicians will be cut by 30% at the end of the year. Congress continues to patch this problem, but real reform of our Medicare program is needed if we are to move away from the SGR formula into a new payment model.
I am concerned about the long-term stability of Medicare. Cutting half a trillion from Medicare to pay for subsidies in Obamacare does not help our seniors. Congress needs to use some of the ideas in the Medicare Part D plan to modernize Medicare Parts A & B to meet future challenges. Medicare Part D has come in under budget with seniors consistently scoring it with high satisfaction rates. Medicare A & B is over 50 years old and continues to have escalating costs and at risk to fraud, waste and abuse.
In 2011, I held a hearing into waste, fraud and abuse in the Medicare program. It is estimated that $60 billion is lost to fraud in Medicare every year. And this is only an estimate, as Medicare purposefully does not estimate the fraud in the system. Because of this problem, I introduced the Promoting Responsibility in Medical Expenditures Act (PRIME, HR 3474) to address some of the flaws in the Medicare system. PRIME would require Medicare to estimate fraud in the system, increase civil and criminal penalties, protects the predictive analytic algorithm, require NPI numbers for Medicare drug reimbursement, incentivizes states to crackdown on prescription drug abuse and requires GAO to do a study on the disclosure of Medicare claims data.