The chairs of key committees in the House of Representatives are working together to draft a health reform bill that focuses on physician payments and the sustainable growth rate (SGR). Representatives Charles Rangel (D. N.Y.), Chair of the Ways and Means Committee and Henry Waxman (D. Calif.) released a summary of the draft legislation on June 15, 2009.
Aims of the bill
The bill would aim for "fundamental and permanent reform" of the SGR, eliminating all deficits accumulated under the existing SGR to allow a fresh start.
Under the proposal, items and services that are not paid under the physician fee schedule, such as lab tests and prescription drugs, would not be counted toward physician payments.
The physician payment rates for 2010 would be determined using the Medicare economic index while the new system is developed. The plan would allow the volume of primary and preventative care to grow at an annual rate 2 percent greater than the gross domestic product (GDP), while most other services would be limited to growth of 1 percent over the GDP.
The proposal also would encourage accountable care organizations (ACO) to take responsibility for quality and costs of their provider members through increased coordination of care. High quality, efficient care would be rewarded, while poor, high-cost care may be penalized.
The committee chairs believe that the existing formula undervalues primary care and fails to distinguish growth in the volume of preventive services from growth in other, more costly practice areas.
Problems with the current SGR
The SGR formula, which is written into law, would have cut physician payments over the last several years. Congress has passed legislation for those years that supersedes the SGR calculations to avoid the reductions. Without amending the statute, however, the deficits have been accumulating. The problem is aggravated by including in the calculation of physician payments many items for which the physicians actually are not paid.
Application of the SGR formula would reduce physician payments by 21 percent inn 2010 and about 5 percent per year for the next four years. According to the legislators, the formula "constrains spending on physician services to growth rates much less than those in other parts of the medical system."
The bill has not yet been introduced. However, hearings will be held by the Energy and Commerce Committee and its Subcommittee on Health for three days beginning Tuesday, June 23, 2009.
CCH Chicago Bureau, June 17, 2009.
For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.
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