PHYSICIAN GROUPS PROPOSE PERMANENT “DOC FIX”
In an October 15 letter, the American Medical Association (AMA) and more than 100 other medical societies and physicians’ organizations urged Congress to consider a permanent replacement for the Medicare physician payment system. Under the Sustainable Growth Rate (SGR) formula used for Medicare Fee Schedule payments, doctors’ reimbursements for services are scheduled to be cut by 27% as of January 1, 2013.

The Centers for Medicare & Medicaid Services (CMS) is required to follow the SGR formula, which was adopted in the Balanced Budget Act of 1997. Since then, the year-end temporary “doc fix” has been an annual controversy. Many healthcare organizations, including the AMA and the American Hospital Association, have been urging Congress for years to find permanent solution to the problem. The Congressional Budget Office estimated in August that a permanent repeal of the SGR will cost the federal government $245 billion, and even another one-year fix will cost $18.5 billion.

The AMA’s letter, addressed to Senators Max Baucus (D-MT) and Orrin Hatch (R-UT), the leaders of the Senate Finance Committee, laid out a list of “principles and core elements that can form the basis for new federal policy on a transition from the SGR to a higher performing Medicare program.” Among them were allowing physician practices a choice of payment models; encouraging incremental changes with positive incentives and rewards, rather than penalties; basing quality measures on matters within a doctor’s control, rather than patients’ actions; and investing in a new infrastructure for Medicare to help doctors transition to new methods of health care delivery and payment.

Given the uncertainties of the current presidential campaign and the federal tax cuts and other laws that are set to expire on December 31 or take effect on January 1, it appears unlikely that Congress will address the proposed permanent fix before the end of this year. Representatives of both parties, however, have informally stated that implementing another one-year fix should not be a problem.

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