The U.S. House of Representatives has passed legislation that would permanently fix a flaw in Medicare's sustainable growth rate (SGR) formula, which calls for a cut of 22% in physician payments by January 1 unless action is taken.
The Medicare Physician Payment Reform Act (HR 3961) would repeal the scheduled reduction and would replace it with a more stable system, the Medicare Economic Index (MEI). The bill passed the House by a 243 to 183 vote on November 19.
The SGR formula requires Medicare payments to be modified annually to control healthcare utilization. Due to a flaw in the SGR methodology, however, the SGR has called for cuts annually in physician payments and has to be corrected every year through congressional action, such as last year's Medicare Improvements for Patients and Providers Act (MIPPA) of 2008.
HR 3961 would also repeal the $200 billion in debt associated with the SGR due to years of temporary fixes, according to the American College of Radiology (ACR) of Reston, VA. A bill in the Senate to repeal the SGR was defeated 47 to 53 in October, largely because that legislation would have offset the cost of the debt by adding it to the healthcare reform package that the Senate recently passed. That would have put the cost of the healthcare reform legislation at higher than $1 trillion, exceeding President Obama's price tag for the bill, the ACR said.
HR 3961 now moves to the Senate, where "its fate is uncertain," according to the ACR.
Related Reading
Effort to fix Medicare SGR formula fails, October 22, 2009
Societies rally to repeal Medicare SGR formula, October 21, 2009
CMS proposes 1.9% increase in hospital outpatient payments, July 8, 2009
CMS pitches 90% use rate in proposed 2010 MPFS rule, July 1, 2009
CMS to raise hospital outpatient payments 3%, July 8, 2008
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