Senate ponders payment fix

New legislation would minimize the scheduled cut in Medicare physician payment.

By Markian Hawryluk, AMNews staff. Nov. 26, 2001.

Washington -- Sens. Jim Jeffords (I, Vt.) and John Breaux (D, La.) have provided the means by which Congress could soften the blow of a scheduled 5.4% cut in Medicare physician payment but have left supporters scrambling to find a way to bring the measure to a vote before the end of the year.

The Medicare Physician Payment Fairness Act of 2001, introduced by Jeffords Nov. 9, would limit the cut in the average per-procedure Medicare payment to 0.9%. It also would require the Medicare Payment Advisory Commission to report on replacing the update formula by March 1, 2002. MedPAC has recommended that Congress scrap the current formula and already has been working on alternate concepts for updating physician payments each year.

Even without the Jeffords bill, MedPAC is expected to address replacement of the update formula in its March report. That may provide a long-term solution but would not stop the reduction scheduled to go into effect on Jan. 1, 2002.

The AMA has expressed its strong support for the Jeffords bill. "This legislation is urgently needed to prevent a 5.4% Medicare payment cut from becoming effective Jan. 1, 2002," said AMA Board Chair Timothy T. Flaherty, MD. "It would also allow Congress, in conjunction with MedPAC, to reconsider the flawed physician payment update formula that has resulted in such sharp Medicare payment reductions." [...]