Major Developments in Senate Re: Physician Payment Formula

On October 14, 2009, Senator Debbie Stabenow (D-MI) introduced the “Medicare Physician Fairness Act of 2009” (S. 1776), which 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.

On Wednesday, the Alliance of Specialty Medicine (the Society is an active member of the Alliance), as well as the American Medical Association and nine other medical societies attended a meeting with the following officials: Senate Majority Leader Harry Reid (D-NV), Senate Finance Committee Chairman Max Baucus (D-MT), Senate Health Committee Member Chris Dodd (D-CT), White House Chief of Staff Rahm Emanuel and Office of Health Reform Director Nancy-Ann DeParle. During the meeting it was announced that S.1776 will serve as the Senate vehicle for eliminating the SGR formula and lay the foundation for establishing a new Medicare physician payment system. This new proposal will be incorporated into broader health care reform legislation.

The Society encourages Senators to support S.1776 as an important first step toward the establishment of a stable physician update mechanism. However, the details of this new system have not been determined.

The Senate is expected to start voting on S.1776 as early as Monday, October 19. The Senate will vote four times. Following Senate rules, the first three votes will be procedural requiring 60 votes. The Senate will then vote for passage of the SGR repeal bill, which requires only 51 votes.

In exchange for repeal of the SGR formula, the Senate Leadership has asked physician groups to support health care reform legislation that is currently moving through the Senate.

While the Society supports the repeal of the SGR formula, we are concerned with several other provisions proposed in the Senate Finance Committee health care reform legislation, such as 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.

Latest News from the House of Representatives
The House of Representatives health care reform legislation currently proposes a permanent fix for the physician payment update. In order to bring the cost of the House legislation under $900 billion, House Leadership is considering removing this proposal from their health care reform legislation and also moving it as a separate bill. Both bills would then be reunited after passage.

The Heart Rhythm Society is closely monitoring these recent developments and is working with other medical societies to discuss our concerns with legislators and their staff.