House panel consults doctors on permanent SGR fix

Lawmakers seek input from 51 organizations representing physicians and other health professionals on how to replace the Medicare pay system.

By Charles Fiegl — Posted April 7, 2011

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The House Energy and Commerce Committee has asked dozens of members of organized medicine, including the American Medical Association, for ideas on how to reform Medicare's payment formula.

The payment system is a major threat to the program, panel members said in a March 28 letter. The sustainable growth rate formula, a budget mechanism that uses economic data and Medicare spending to help calculate annual pay rates, has mandated physician pay cuts in recent years. Since 2002, Congress has stepped in to delay the cuts temporarily by freezing physician pay or providing small percentage increases.

The House lawmakers say they want to fix the problem permanently. The AMA is pleased that the committee is looking for such a long-term solution, said J. James Rohack, MD, AMA immediate past president. The Association and 130 state and medical specialty societies had sent a letter to Congress on March 10 urging them to take action.

"We look forward to continuing to work with Congress to replace the broken Medicare physician payment system with one that better reflects the costs and practice of 21st century medical care and provides stability for physicians and their Medicare patients," Dr. Rohack said.

In 2012, Medicare is scheduled to cut doctor pay rates by 29.5%. President Obama's fiscal 2012 budget proposal would freeze payments at 2011 levels for the next 10 years. That plan would cost an estimated $298 billion over the next 10 years, according to a Congressional Budget Office report released March 18.

The House committee's letter said two problems prevent reform of the SGR: the $300 billion budget impact and a lack of consensus on what kind of pay system should replace the Medicare physician fee schedule.

The committee hopes the responses to the letter will provide clarity on these issues. The letter went out to 51 organizations representing physicians and other health care professionals.

"The House Energy and Commerce Committee is determined to achieve a permanent, sustainable solution to the Medicare physician payment problem this year," the letter states. "Toward that end, the committee would welcome specific ideas and proposals from physician organizations and the provider community on how to reform the physician payment system and move to a system that reduces spending, pays providers fairly and pays for services according to their value to the beneficiary."

Reps. Fred Upton (R, Mich.), Henry Waxman (D, Calif.), Joe Barton (R, Texas), John Dingell (D, Mich.), Joe Pitts (R, Pa.), Frank Pallone (D, N.J.) and Michael Burgess, MD (R, Texas), signed the letter.

"For too long, Congress has failed to address the outdated physician payment system," said Upton, the committee's chair. "Each time Congress delays action, the costs to taxpayers and providers increase. The committee is committed to working together to implement a permanent, sustainable solution this year that lessens taxpayers' burden and ensures providers have the resources they need to provide quality care to patients."

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