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Rebecca Farley

Director, Policy & Advocacy, National Council for Behavioral Health

Medicare Physician Pay Fix Advances

November 7, 2013 | Medicare | Comments
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Leaders of two key Congressional committees have agreed on a framework to scrap the current Medicare physician payment formula and replace it with one that would link reimbursement to the quality of care provided – a step that could put an end to the annual “Doc Fix” debate.

Without congressional action, Medicare physicians will suffer a major cut in pay rates this January. The cut is required under the Sustainable Growth Rate (SGR) formula, which compels Medicare to adjust payment rates each year to align with a predetermined rate of growth in the program. In practice, this has meant that Medicare payments would take an ever-increasing yearly cut – but each year, Congress has passed legislation postponing those cuts.

Released last Thursday by the Senate Finance and House Ways and Means committees, the new joint proposal is similar to one passed by the House Energy and Commerce Committee in July. Both plans aim to shift provider payments from fee-for-service to quality-based payments.

This year has been notable for lawmakers’ bipartisan cooperation on developing a permanent fix to the yearly physician pay dilemma, but they have yet to agree on over $100 billion to pay for it. Neither this week’s joint proposal nor the July Energy and Commerce bill detail how the costs of the pay fix would be offset. Congressional aides say the SGR repeal could be paid for as part of a bigger budget package currently under negotiation by a special budget conference committee established in the deal to end the recent government shutdown. Budget negotiators had their first meeting last Wednesday and are to report recommendations to Congress by Dec. 13.