American Society of Hematology

Congress Considers Medicare Physician Payment Reforms; Legislation Expected by End of Year

Published on: July 02, 2013

Committees in both the House of Representatives and the Senate continue to work on legislation to reform physician payment in Medicare. On June 28, the House of Representatives' Energy and Commerce Committee released advanced draft legislation to replace Medicare's physician payment system and noted that the Committee plans to vote this summer on legislation. The advanced draft legislation would repeal the current payment formula known as the Sustainable Growth Rate (SGR) and replace it with a quality-based system, while also allowing providers to participate in new delivery models. The legislation also includes proposed payment scenarios for the update incentive program.

The draft legislation builds on detailed proposals House Republican leadership released in April and May. ASH submitted comments to the House Republican leadership in response to the April proposal and additional feedback to the Energy and Commerce Committee on the May draft legislation. ASH’s comments supported repealing of the SGR and replacing the current payment formula with predictable payment rates for at least five years while stakeholders develop a new payment system that combines a base payment rate with a variable rate tied to quality performance.

The Energy and Commerce Committee has asked ASH and other medical societies for feedback on its advanced draft legislation and the Society is currently working on a response to share with the Committee, before its July 9 deadline.

Additionally, in May, Senate Finance Committee leaders sent a letter to ASH requesting feedback on how to reform Medicare physician payment. The Committee also noted its interest in identifying alternative payment models that focus on volume control and performance incentives. In response, ASH submitted comments to the Senate Finance Committee reiterating the Society's message to repeal the SGR formula and replace the current payment formula with predictable payment rates for at least five years. The Society also urged the Committee to consider a new payment system that would improve the value of cognitive services, reinstate Medicare reimbursement for consultations, and utilize initiatives such as ABIM Foundation's Choosing Wisely® Campaign to reduce Medicare spending.

Because the cost estimate of repealing the SGR has been reduced significantly and because Members of Congress have finally come to understand that the current system, which has scheduled significant payment cuts each year, is not sustainable, policy analysts expect legislation to reform Medicare payment may actually be completed this year unlike previous years when only short-term patches were passed, the latest of which lasts through the end of 2013.

Take Action: ASH clinicians are strongly encouraged to join the Society's on-line advocacy campaign urging Congress to repeal the current payment formula and to find a balanced approach to deficit reduction.

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