Lawmakers offer dueling approaches on fixing doc pay

February 12, 2013
Industry News

Dueling legislative approaches to overhaul the Medicare physician payment formula emerged this week.

The new movement on the stubborn problem comes as the Congressional Budget Office revised the 10-year cost of fixing it down by more than 40%, to $138 billion from $245 billion, based on lower spending on physician services in recent years.

There are some general similarities but also critical differences between an approach contained in bipartisan legislation introduced Wednesday and a Republican bill expected in the coming months.

Both a bill introduced Wednesday by Rep. Allyson Schwartz (D-Pa.) and a bill expected from Ways and Means Health subcommittee Chairman Kevin Brady (R-Texas) would replace the sustainable growth-rate formula with temporary increases while replacement methodologies were devised.

But the bills differ on important points, including whether federal officials or physician groups would take the lead in developing new payment systems and the degree to which fee-for-service payments would be eliminated.

Schwartz’s bill (PDF) would mostly unravel the fee-for-service system by requiring physicians to adopt one of several replacement models that the CMS would test and approve over five years. Physicians who did not do so would face successive payment cuts, although a small number of physicians could remain in a modified fee-for-service system if they met certain quality benchmarks or were near retirement.

But that small fee-for-service allowance was not enough to garner the support of the biggest physician advocacy groups such as the American Medical Association, which wanted a larger allowance for rural physicians to continue to use the traditional payment system, according to Capitol Hill sources.