In the race to get health reforms approved by the end of the year, doctors and other healthcare lobbying groups are hoping that Medicare’s physician payment fix will be the first to cross the finish line.

But as the Senate moves to consider a bill on the floor next week to remove the troublesome formula that sets Medicare payment rates for doctors, murky questions remain on how the multibillion-dollar problem will ultimately be paid for.

Medicare’s physician payment formula is driven by the sustainable growth rate, or SGR, which is based on the economy’s health, and has produced results that have threatened payment cuts to physicians since 2003. Congress has stepped in every year to enact a temporary fix so that doctors won’t experience additional reductions to their Medicare payments, a measure that racks up additional costs and adds to the frustrations of doctors who want a permanent solution.

Physicians in 2010 face a 21% cut to Medicare reimbursement unless Congress intervenes once again. The Congressional Budget Office has estimated it would cost $285 billion to fix the SGR.

Healthcare reform overhauls in both the House and Senate already contained measures for addressing Medicare physician payment reform, but the issue seemed to take on a life of its own last week when Senate healthcare leaders held a summit with the major medical groups to support a stand-alone bill by

Sen. Debbie Stabenow (D-Mich.) to remove the SGR entirely from the payment formula.

“What the Stabenow bill does is take the SGR out of the picture, allowing us to work on an alternative” payment system for doctors, said Lori Heim, the new president of the American Academy of Family Physicians. The bill does not propose what the new formula would be, “but we can’t get to the new formula until we take care of the current one.”

Physician groups have long advocated for the SGR to be replaced with the Medicare Economic Index, a measure of inflation that includes a bundle of inputs used in furnishing physician services such as a physician’s own time, nonphysician employees’ compensation, rent and medical equipment.

The physician lobby claims a one-year “fix” included in legislation approved by the Senate Finance Committee last week wasn’t adequate to address the problem. “We need complete, comprehensive payment reform and not one-year Band-Aids,” said Jack Lewin, CEO of the American College of Cardiology.

Doctors aren’t the only ones in healthcare who want this problem solved soon. The AARP, in telling Senate Majority Leader Harry Reid (D-Nev.) that the physician fix was its “No. 1 priority,” is sending out a clear message that they want doctors to continue treating Medicare patients.

Stabenow’s bill appears to be charging full-speed ahead of the larger healthcare reform debate, appearing for consideration on the Senate floor as early as this week. “It is important we get this right—we fix what has been a very flawed system,” Stabenow said.

Addressing the Medicare payment fix separate from healthcare reform would also be the “preferred” option in the House, Rep. Chris Van Hollen Jr. (D-Md.), who sits on the House Ways and Means Committee, told reporters last week. Given the high price tag of paying for such a fix and the unique dilemma it presents to doctors, lawmakers believe it would just be easier to separate the SGR from healthcare reform and address it on its own merits.

The rub, of course, is finding the resources to pay for such an overhaul. Stabenow claims her bill doesn’t have to be offset, although the CBO has estimated her legislation would add $250 billion to the federal deficit, argued Rep. Mike Pence (R-Ind.), chairman of the House Republican Conference, in an analysis of the SGR fix.

House Majority Leader Steny Hoyer (D-Md.) maintains that the cost of the SGR fix in the House bill has already been dealt with in the budget resolution approved earlier this year. That measure waived the SGR fix from federal “paygo” rules, enabling the fix to be payed for out of general revenue. However, a fix would still add to the federal deficit.

Rep. Michael Burgess (R-Texas), who has sponsored healthcare legislation to revamp the SGR, says there are better ways to pay for the SGR fix than letting its price tag be absorbed by deficit spending, such as the money saved from medical liability reforms.


To view the original article click here.