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House committee continues to craft Medicare physician payment reform legislation

On May 28, the House Committee on Energy and Commerce unveiled draft legislation to repeal the current Sustainable Growth Rate system and replace it with a more fair and stable system of physician reimbursement in the Medicare program. The draft legislation, intended for discussion purposes, is the latest step in the process to reform the system and reward providers for delivering high quality, efficient health care. The draft legislation would repeal SGR and replace it with an improved fee-for-service system in which providers — working with the secretary of the Department of Health and Human Services — would develop quality measures that will lead to better care in a more efficient manner. Providers will also have the option of leaving the fee-for-service system and opt instead for new ways of delivering care.

In addition to the House Energy and Commerce Committee, the House Ways and Means Committee and Senate Finance Committee are also currently working on this issue. Enthusiasm for fixing Medicare's flawed physician payment system has increased dramatically this year, since the Congressional Budget Office reduced its estimated cost to reform it by more than $100 billion.

Enacted in 1997 as part of the Balanced Budget Act, the SGR has been a source of continued concern for physicians who serve Medicare beneficiaries and for the beneficiaries themselves. Long recognized as an imperfect process, Congress has repeatedly had to take action to avert substantial Medicare reimbursement rate cuts, which could result in fewer physicians being able to serve Medicare patients.

AAGP is continuing to work with other physician organizations to reform the Medicare payment system on a permanent basis and is providing feedback to congressional committees and others. There needs to be a permanent solution to this problem in order to preserve Medicare beneficiaries' access to care and to provide for fair reimbursement for all practitioners under the Medicare system. more

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