American Society of Hematology

Senate Considering Medicare Physician Payment Reforms

Published on: May 23, 2013

On May 10, the Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) sent a letter to ASH, and other health care providers and groups requesting feedback on how to reform Medicare physician payment. The Committee is seeking responses to the following three questions:

  1. What specific reforms should be made to the physician fee schedule to ensure that physician services are valued appropriately?
  2. What specific policies should be implemented that could co-exist with the current Fee-For-Service (FFS) physician payment system and would identify and reduce unnecessary utilization to improve health and reduce Medicare spending growth?
  3. Within the context of the current FFS system, how specifically can Medicare most effectively incentivize physician practices to undertake the structural, behavioral and other changes needed to participate in alternative payment models?

ASH is currently working on a response to share with the Finance Committee, before its May 31 deadline and encourages members to share any thoughts or ideas by contacting as soon as possible.

In January the Senate and House of Representatives averted a 27.5 percent cut to Medicare physician payment by delaying the deadline for the cuts until December 31, 2013 and pledging to use this year to work out a permanent solution. The Senate Finance Committee has indicated its agreement that Sustainable Growth Rate (SGR) must be repealed and its interest in identifying alternative payment models that focus on volume control and performance incentives.

On the House of Representatives' side of the Capitol, the Republican leadership recently released a detailed version of a proposal to repeal the SGR formula and plan to vote this summer on legislation. ASH submitted comments in response to the proposal supporting repeal 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. In addition, earlier this year, Representative Allyson Y. Schwartz (D-PA) and Representative Joe Heck (R-NV) also introduced legislation to repeal the SGR (H.R. 574).

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 is actually likely to be completed this year unlike previous years when only short-term patches were passed.

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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