Government

House votes to scrap Medicare doctor pay formula

The bill, which would base pay more closely on costs, now moves to the Senate. That chamber has already rejected a similar measure this year.

By Chris Silva — Posted Nov. 19, 2009

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The U.S. House of Representatives passed a major bill Nov. 19 that would abandon the current Medicare physician payment formula and allow future rates to increase based more closely on doctors' costs, a revision that is expected to cost roughly $210 billion over 10 years.

By a vote of 243-183, the House approved the Medicare Physician Payment Reform Act of 2009. The measure would reverse a 21.2% payment cut planned for Jan. 1, 2010, wipe out the accumulated physician spending debt and implement a new formula.

The new spending growth rate target for physician services would be equal to the gross domestic product plus 1%. Preventive care and evaluation and management services would have a separate target of gross domestic product plus 2%, allowing primary care pay to increase at a higher rate over time.

"Without action by both houses of Congress, Medicare will cut payments to physicians by 21% in 2010, with more in years to come. Today's House vote is the first step toward preventing this cut and eliminating the formula that creates a roller coaster of uncertainty for seniors and physicians who care for them," said American Medical Association President J. James Rohack, MD, who called on the Senate to act on the legislation. "Promises have been made to seniors and military families -- and the House recognizes that those promises must be kept."

The White House in advance of the vote issued a statement strongly supporting the legislation. "The administration believes Medicare and the country need to move toward a system in which doctors receive better incentives to provide their patients with higher quality and more efficient care," said the Nov. 18 statement from the Office of Management and Budget. "A cut of this magnitude could reduce access to physicians for Medicare beneficiaries throughout the country."

The Senate must still approve the legislation before it can head to President Obama's desk. The upper chamber has already rejected a bill once this year that would have eliminated the Medicare physician payment formula. That legislation ran into opposition from Republicans and fiscally conservative Democrats who said they did not want to raise the federal deficit by hundreds of billions of dollars.

The House measure was originally part of the chamber's health system reform bill but was stripped out for separate floor consideration. The primary reason for this was to decrease the total cost of the main reform package and to keep the final dollar figure under a White House-imposed limit.

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