Legislation Introduced to Increase Medicare Physician Payments

May 12, 2005 – Senators John Kyl (R-AZ) and Debbie Stabenow (D-MI) introduced legislation in the Senate (S. 1081) and Representatives Clay Shaw (R-FL) and Ben Cardin (D-MD) in the House of Representatives (H.R. 2356) to reform the Medicare payment update system through repeal of the sustainable growth rate (SGR) spending target. Based on an outdated calculation system, current SGR payment updates to physicians have not kept pace with medical inflation. Currently, Medicare predicts a 4.3% cut for physicians in 2006 (see the ASH Web site for more information).

The bill would set Medicare's CY 2006 physician payment update at "not less than 2.7 percent." It would replace the Sustainable Growth Rate (SGR) methodology with a new formula for calculating physician payments in CY 2007 and beyond. The new formula, which appears to be based on recommendations made by the Medicare Payment Advisory Commission (MedPAC), would reflect changes in input prices, less a productivity adjustment. MedPAC had recommended the new formula in its March 2005 Report to Congress as a long-term solution to the problematic SGR methodology.

ASH continues to work with Congress and CMS to pursue adequate physician reimbursement. For more details, please visit the Policy section of the ASH Web site.