House hearing previews potential Medicare pay-for-performance plan

A combo bill addressing payment reform and pay-for-performance emerges in the House as the administration raises the estimated cost of repealing the reimbursement formula.

By David Glendinning, AMNews staff. Aug. 8, 2005.

Washington -- The leader of an influential House panel in late July started drafting her own version of a Medicare payment reform bill that also appears to address some of the physician community's concerns about pay-for-performance.

Rep. Nancy Johnson (R, Conn.), chair of the House Ways and Means health subcommittee, held a hearing last month in which physician witnesses weighed in on the need to halt impending Medicare cuts and the prospect of realigning the system to reward high-quality care.

Days before the hearing, Johnson's staff held a closed-door meeting with various specialty societies to float a draft of her Medicare "value-based purchasing" legislation. The measure would throw out the current payment system under which physicians face lower reimbursements in the next several years and implement a plan that is designed, in part, to pay doctors based on how well they perform on pre determined measures.

The developing legislation, which Johnson was still preparing for introduction at press time, drew a positive initial reaction from the American Medical Association.

"Overall, many of the elements that we understand you have included in your legislation are consistent with a number of [AMA] principles and guidelines" on pay-for-performance, said AMA Trustee John H. Armstrong, MD, who testified at the subcommittee hearing.

Unlike a recently introduced Senate bill on Medicare pay-for-performance, the draft House bill would commit new money to the system by abandoning the current physician pay formula in favor of one that better tracks the costs of providing medical services. Senate sponsors decided to pursue the pay formula issue in a separate bill.