The Medicare Payment Advisory Commission issued two reports to Congress today. The commission offered two alternatives for controlling physician expenditures under Medicare: repealing the current sustainable growth rate formula and not replacing it with a new expenditure target, or finding a new expenditure target system. And MedPac recommended that Congress implement a full marketbasket update, currently estimated at 3.1% for both inpatient and outpatient prospective payment systems in fiscal 2008.
Regarding the SGR, no analysis was done to assess the impact of these alternatives, but either approach would cost money, MedPAC Executive Director Mark Miller said at a briefing. The SGR ties annual expenditure targets to the economy and has called for negative payment updates over the past few years. If Congress chose a new expenditure system, that system should apply to all providersnot just physiciansand distribute rewards and penalties on a geographic basis, the report concluded.
Concerning the hospital update, the American Hospital Association offered its support, but opposed a commission recommendation to reduce the indirect medical education adjustment by 1 percentage point next year. -- by Jennifer Lubell