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Bipartisan agreement on physician payment formula

from AAGP

On Feb. 6, Congressional lawmakers announced a bicameral, bipartisan agreement to reform Medicare’s troublesome physician payment formula. The proposed legislation merges legislative language produced by the House Ways and Means Committee, House Energy and Commerce Committee, and Senate Finance Committee over the past year into a new proposal. That proposal, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (H.R. 4015), which was introduced in the House of Representatives by Congressman Michael Burgess, MD, R-Texas, addresses only the policy provisions related to eliminating the flawed payment update formula. It does not include financial offsets. The agreement includes a 0.5 percent payment update for physicians for five years before transitioning to an alternative payment model structure. In addition, the new proposal would provide financial incentives for physicians to participate in alternative payment models, including a five percent bonus to providers who receive a significant portion of revenue through APMs. This proposal to replace Medicare’s sustainable growth rate formula with a new payment system is expected to cost approximately $128 billion over ten years, according to an estimate by the Congressional Budget Office.

While the announcement — which came on the same day that the Senate confirmed Senate Finance Committee Chairman Max Baucus, D-Mont., as ambassador to China — is good news for Medicare-participating physicians, it is by no means a done deal. Still to come from lawmakers are details on how to pay for repealing the SGR, extend certain Medicare programs, and address other Medicare and Medicaid policies as part of a total legislative package that is expected to cost between $140 billion and $145 billion over ten years. Although the Feb. 6 announcement is a step forward, there are still many details that need to be ironed out before legislation to repeal Medicare’s SGR formula can be enacted.

A short-term delay of a 24 percent Medicare reimbursement cut for physicians expires after March 31.

AAGP supports a full repeal of the SGR formula so that access to care for all Medicare beneficiaries, across all specialties, is protected. Recognizing that geriatric psychiatrists treat an overwhelming majority of Medicare patients, the possibility of ongoing payment reductions driven by a flawed formula will further undermine access to mental health care for the nation’s older adults. AAGP remains committed to working with AMA and other organizations to reform the Medicare payment system on a permanent basis. more

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