Washington Update

President Obama Proposes Fixing Medicare’s Physician Payment System

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Language in President Obama’s FY 2014 budget proposal on fixing Medicare’s physician payment system is strikingly similar to that being used by House Republicans, which could add further momentum to the drive to adopt a permanent fix this year, according to physician and stakeholder groups. Medicare’s sustainable growth rate (SGR) formula is designed to ensure that yearly increases in costs per Medicare beneficiary do not exceed the growth in gross domestic product (GDP).

Stakeholders say language in the White House plan, released April 10, 2013, in many ways mirrors that being used by House Republicans on such subjects as allowing for a period of stable payments while new payment models are developed and implemented, and linking payments to the delivery of quality care. “The administration supports a period of payment stability lasting several years to allow time for the continued development of scalable accountable payment models,” the White House budget plan says.

The House Energy and Commerce and Ways and Means committees have released the second draft of a permanent physician payment fix plan and say they hope to have legislation on the House floor by the August congressional recess. Their draft contains language on implementing quality of care reimbursement measures that also reward providers for delivering high-quality care. A summary of the House’s plan can be found here.

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