AMA Wire

Wednesday, May 16, 2012

This Week's News

Senate committee explores future of Medicare physician payment

Senate committee explores future of Medicare physician payment

As a looming Medicare physician payment cut of nearly 30 percent threatens access to care for seniors and military families, the U.S. Senate Finance Committee began a bipartisan series of discussions last week examining the escalating Medicare physician payment crisis.

These roundtable discussions, the first of which featured testimony from former administrators of the Medicare program, are intended to take a close look at the history of Medicare physician payment to better understand how to move forward.

Sen. Max Baucus, D-Mont., who chairs the committee, noted in his opening remarks that Medicare's sustainable growth rate (SGR) formula "hasn't worked as planned." The annual cuts the formula calls for have "snowballed" the problem, he said.

Since 2002 Congress has passed 14 short-term patches to stave off increasingly detrimental cuts, essentially freezing physician payments while the cost to care for patients rose 20 percent. Without congressional action, physicians will face a 30 percent cut on Jan. 1.

Sen. Orrin Hatch, R-Utah, the committee's ranking member, also commented on the inadequacy of the SGR and the need for a permanent solution. "We must provide a stable foundation for paying physicians today and tomorrow, not five or 10 years from now," he said in a statement.

In a statement, the AMA applauded the committee's leadership and said it will continue to work with Congress to eliminate the SGR.

Last week also saw the introduction of a bill by Rep. Allyson Schwartz, D-Pa., and Rep. Joe Heck, DO, R-Nev., that would replace the SGR with an interim payment schedule while new physician payment options are devised.

"This legislation is consistent with proposals put forth by the AMA to immediately eliminate the failed formula and provide stability in Medicare while new care coordination models, designed to improve quality and reduce costs, are tested and implemented," AMA President Peter W. Carmel, MD, said in a statement.

"We have concerns about potentially limited options in this legislation for physicians who are not able to participate in new delivery models, but we believe this bill takes an important step in the right direction," Dr. Carmel said. "We look forward to continuing to work with Reps Schwartz and Heck, and all their colleagues in Congress, to fix the Medicare physician payment problem once and for all."