Senators Want Provider Feedback on Medicare Payments

Leaders of the Senate Finance Committee are asking doctors to answer questions about the physician fee schedule and changes that would be necessary to accommodate alternative payment models.

In advance of a "doc fix" repeal hearing scheduled for Tuesday, the Senate Finance Committee has reached out to more than 100 healthcare providers for specific recommendations on how to improve Medicare's physician payment system.

In a co-signed letter Sen. Max Baucus (D-MT), committee chair, and Sen. Orrin Hatch (R-UT), ranking member, call for "a permanent solution that will address the SGR and physician payment reform."  

Physicians face a 25% payment reduction in 2014 under the current sustainable growth rate formula. Congress has tried and failed to repeal it for years.

The senators are looking to healthcare providers for help, emphasizing that "comments containing specific suggestions will be the most valuable to the committee." Physicians and other providers are asked to respond to 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 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?

Stakeholders have until May 31 to provide responses. What happens after that is anyone's guess. No timetable for future action has been released.

Although there is widespread agreement that the SGR is flawed and needs to be replaced, In a longstanding delay tactic,  Congress has long opted to intervene on an annual basis to prevent physician payment cuts rather than develop a permanent solution. A bipartisan-sponsored  repeal bill introduced in February has the support of  the AMA and the American Academy of Family Physicians among other key physicians groups.

See Also: SGR Ripe for Repeal, Where's Congress?

A Congressional Budget Office analysis released in February 2013 slashed $107 billion from the cost of eliminating the SGR and is credited with resuscitating efforts to repeal the unpopular formula. Whether the seemingly significant financial incentive is enough to overturn the SGR remains to be seen.

Last week the House Ways and Means subcommittee on Health spent several hours exchanging ideas about reforming the SGR with a group of influential healthcare stakeholders. At this point it's difficult to imagine what new information remains to be discovered.

The House Ways and Means Committee sent a similar letter in April 2012 to the American Medical Association and the Medical Group Management Association. In their responses, the AMA and MGMA identified possible alternative payment models, including performance-based and bundled payments.

Baucus and Hatch hosted a number of roundtables about Medicare payments in 2012 that featured physicians, former administrators of the Centers for Medicare & Medicaid Services, and private payers. While those meetings covered a wide range of topics, including models of care, specialty reimbursements, and quality and efficiency, no magic bullets were identified.