House, Senate Move Ahead on Medicare Physician Pay Reform

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PJMedia:

WASHINGTON – House and Senate panels voted last week to advance legislation that would repeal Medicare’s physician payment system and avoid looming cuts in reimbursements to physicians participating in the Medicare program.

 

Both chambers of Congress marked up bills Thursday that would repeal the sustainable growth rate (SGR) formula and replace it with a system moving Medicare toward value-based payments.

 

The SGR system, created by the Balanced Budget Act of 1997, ties Medicare’s physician-related spending per beneficiary to U.S. gross domestic product growth. Beginning in 2002, the formula was supposed to cut physician payments. Instead, every year Congress has bypassed the cuts by passing a temporary fiscal maneuver known as the “doc fix.”

If the SGR formula took effect on Jan. 1, 2014, Medicare managers would have to cut the pay of the physicians enrolled in the traditional Medicare program by more than 20 percent.

The House Ways and Means Committee unanimously approved legislation Thursday morning that would not only cancel the SGR but also replace it with a payment system that rewards quality and performance over volume. The Senate approved its own version of the bill later that day.