Emphasizing payment

Physician groups emphasized payment reform as a key component in changing the nation’s healthcare system after House leaders last week drafted legislation that would permanently alter the formula that calculates physician Medicare reimbursement.

Under the current sustainable growth-rate formula, physician fees in Medicare are expected to be cut by 21% in January 2010 and by about 5% for the following four years. But last week, House lawmakers drafted a proposal that would replace that formula entirely and eliminate the existing accumulated deficits.

The House’s proposed legislation to change the SGR would provide an update for 2010 based on the Medicare economic index; exclude items such as prescription drugs and laboratory services not paid under the Medicare fee schedule; and provide an extra growth allowance for primary-care services, according to a summary from the House Ways and Means and Energy committees. Altogether, the proposed reforms are expected to cost less than $300 billion over 10 years.

Physician groups have been fighting for a change to the SGR for years, but the mandated cost of doing so has led Congress to annually apply a Band-Aid instead to prevent reimbursement cuts. Late last month, dozens of medical organizations—including the American Medical Association and Medical Group Management Association—called on federal lawmakers to repeal and replace the SGR, among other recommendations (June 1, p. 4).

Ted Epperly, a family physician in Boise, Idaho, who serves as president of the American Academy of Family Physicians, which supported that effort, said the draft legislation is in line with what his association wanted.

“I’m very happy to see the House committees put this language in,” Epperly said. “What that signals is that they get it,” he said, adding that the SGR formula must be “re-baselined so that we can move forward to a reformed Medicare healthcare system.”

Meanwhile, after its annual meeting that welcomed President Barack Obama the American Medical Association touched on the SGR issue when it released a statement from its new president, J. James Rohack, that said physicians are involved in the healthcare reform debate to test new approaches and identify best practices.

“In order for physicians to make these improvements,” Rohack said, “government action is needed with antitrust relief, repeal of the fatally flawed Medicare physician payment formula, and medical liability protections.”

What do you think?

Write us with your comments. Via e-mail, it’s [email protected]; by fax, 312-280-3183.