Medicare Physician Payment “Fix” Defeated in The Senate

The “Medicare Physician Fairness Act of 2009” (S. 1776) was introduced on October 14, 2009 by Senator Debbie Stabenow (D-MI). S.1776 would permanently repeal the Medicare physician payment update formula, also known as the sustainable growth rate (SGR) formula. The proposed legislation would erase the SGR debt (avoiding the 21 percent cut in January 2010) and would install a freeze in reimbursement rates for 2010 and subsequent years.

In a meeting last week attended by the Alliance of Specialty Medicine and nine other medical societies, Senate Majority Leader Harry Reid (D-NV) announced that this bill would serve as the Senate vehicle for eliminating the SGR formula and lay the foundation for establishing a new Medicare physician payment system and be incorporated into the broader healthcare reform legislation.

On October 21 the Senate debated and voted on S. 1776 to invoke cloture (i.e., to end the debate and move the bill forward). Sixty votes were required for this procedural vote. Unfortunately, the bill did not gather the necessary votes. The vote was 47 yeas and 53 nays; therefore the bill will not move forward. Several Democrats voted against the bill because of budgetary concerns.

The Society’s Position
While the Society supports the repeal of the SGR formula and encouraged Senators to support S 1776, we are concerned with several other provisions proposed in the Senate Finance Committee health care reform legislation. Among these concerns are mandatory pay for performance, payments cuts to physicians who exceed resource use benchmarks, preferential payment for primary care and placing payment system decisions in the hands of a new Medicare Commission composed of 15 unelected individuals. Learn more about the Society’s concerns with the bill