Congress not likely to pass permanent Medicare physician payment fix this year

Senate Finance Committee Chair Max Baucus (D-Mont.) on Monday said that comprehensive health reform legislation likely will not include a permanent solution to the Medicare physician payment system, CQ Today reports.

The Medicare sustainable growth rate requires physician payment cuts to control costs each year since the beginning of the decade, but Congress has approved short-term patches nearly every year to avoid the reductions. However, each temporary fix requires steeper cuts in future years, and the formula will require a 21% reduction in physician payments in 2010 (Armstrong, CQ Today, 5/4). According to the Congressional Budget Office, freezing physician payment rates for 10 years would cost $285 billion (Young, The Hill, 5/4).

Last week, Baucus and Finance Committee ranking member Chuck Grassley (R-Iowa) released an options paper that proposed a short-term Medicare physician payment patch, in addition to other changes to the program (Edney, CongressDaily, 5/4). In a conference call hosted by the Center for American Progress Action Center on Monday, Baucus said, "We'll patch it up for each of these next three years, but after that we'll let some of the reduction occur." He added that "physicians will be compensated with some of the cost-sharing gains that hopefully will occur with some" of the options discussed last week (CQ Today, 5/4). He added, "We're trying to reform SGR in a way that's consistent with the general goals of comprehensive health care reform" (The Hill, 5/4).

Under the plan, physicians would be compensated with new bonuses for providing higher-quality, lower-cost care. The proposal also would shift more focus to preventive care and controlling chronic disease costs (CQ Today, 5/4). In addition, the proposal would increase payment rates for primary care physicians and general surgeons who practice in rural areas (The Hill, 5/4).