Medicare Compliance & Reimbursement

Republicans, Democrats agree upcoming cuts are unacceptable.

Instead of seven lean years starting next year, physicians could receive guaranteed pay increases from Medicare, if one pending bill becomes law.

Rep. Nancy Johnson (R-CT), chair of the House Ways and Means Health Subcommittee, is drafting a bill that would repeal the Sustainable Growth Rate formula which calls for cuts of nearly five percent over the next seven years. It also would require pay for performance or "value-based purchasing."

Rep. Johnson's staff showed a draft of the bill to physician organizations and other advocates last week, and a final version may be released this week, says Piper Nieters, an attorney with Powers Pyles Sutter & Verville in Washington who saw the draft bill. The bill would set out positive updates for physician payments for the next few years, and then put in place a new formula for future updates based on actual physician cost data.

Docs May Fancy Johnson's P4P Vision

Physicians may welcome Johnson's version of P4P, which would give a greater role to specialty societies, says Nieters. Instead of appointing a central commission to come up with physician quality measures, the Johnson bill would ask each physician specialty group to submit recommendations for quality measures to an independent agency such as the National
Quality Forum by March 1, 2006. The agency would then offer recommendations to the HHS Secretary.

Some physician groups did have a concern about this approach, notes Nieters. They claimed that the NQF already has a backlog in dealing with their quality recommendations. If the NQF or some other agency was unable to process their recommended quality measures quickly, then some physician specialties could find their quality measures left out of the final version, they worried.

Rep. Johnson and Ways and Means Chair Rep. Bill Thomas (R-CA) recently wrote to the Centers for Medicare and Medicaid Services asking the agency to remove Part B drugs retroactively from the SGR. That move would reduce the pressure for steep cuts to physician spending, and make it more affordable for Congress to avert those cuts.

But the agency doesn't have the authority to remove drugs from the formula, CMS Administrator Mark McClellan testified in a July 21 hearing of the Health Subcommittee. Current law only allows CMS to verify or adjust the SGR formula twice, and CMS has already made those adjustments. Also, removing drugs from the formula wouldn't be enough to guarantee positive updates, McClellan warns.