MedPAC developing options for Medicare formula

In a March report, the commission will stress efficiency and quality as key elements in a new pay structure.

By David Glendinning, AMNews staff. Nov. 6, 2006.

Washington -- With prospects for long-term reform of the Medicare physician payment system all but off Capitol Hill's table for the rest of the year, the panel that advises Congress on the program is debating options to offer lawmakers this spring.

Congress has required the Medicare Payment Advisory Commission to submit a report by March that suggests alternatives to the formula that helps determine physician pay. Absent congressional intervention, the sustainable growth rate formula will prompt an estimated 5.1% cut as of Jan. 1. In addition, the formula has doctors facing similar annual cuts for most of the next decade.

The group has its work cut out for it. At the panel's October meeting, MedPAC Chair Glenn Hackbarth said the directive from lawmakers goes beyond just determining a new government formula for paying doctors.

"There is agreement within the commission that improving the efficiency and quality of the services provided to Medicare beneficiaries is not as simple as coming up with a new SGR mechanism," he said. "There's work to be done on many different fronts if we want to improve efficiency and quality."

Along those lines, MedPAC members discussed a draft list of about a dozen potential ways Medicare could pay more accurately and efficiently for doctor care regardless of what specific payment system overhaul the commission recommends. Including such recommendations in the report will help put the final reform proposals in the context of broader system change, Hackbarth said. He said the group might add items to or delete items from the list before it presents its options to Congress.