Bill would revise physician payment formula

Healthcare Financial Management, July, 2005

A bill has been introduced in the House of Representatives that would permanently fix the flawed Medicare physician payment formula. Under the Preserving Patient Access to Physicians Act of 2005 (H.R. 2356), the current formula for calculating Medicare physician payments, based on a sustainable growth rate, would be replaced with an annual update that reflects practice cost increases. The bill would provide physicians with a payment update of at least 2.7 percent in 2006, with annual updates beginning in 2007. Under the SGR formula, CMS estimates a decrease of 4.3 percent in the physician fee schedule for 2006. As of June 13, the bill, introduced by E. Clay Shaw, Jr. (R-Fla.) and Benjamin L. Cardin (D-Md.), has 34 cosponsors and is before the Committee on Energy and Commerce.

In the Senate, a bill of the same title (S. 1081) has been introduced by Jon Kyl (R-Ariz.) and Debbie Stabenow (D-Mich.). However, it would not repeal the SGR but would only provide a two-year update to the Medicare physician payment schedule, based on recommendations of the Medicare Payment Advisory Committee.

To read H.R. 2356, Preserving Patient Access to Physicians Act of 2005, go to thomas.loc.gov, and enter bill number H.R. 2356.

To read S. 1081, Preserving Patient Access to Physicians Act of 2005, go to thomas.loc.gov, and enter bill number S. 1081.