Medicare Compliance & Reimbursement

Johnson still pushing for SGR repeal.

At a March 15 hearing, Rep. Nancy Johnson (R-CT) continued her push for fundamentally restructuring the way Medicare pays physicians.

The current system is based on a "sustainable growth rate" formula, which attempts to keep Medicare's physician costs within certain limits by cutting fees when the complexity and volume of services go up. The system as currently constructed would cut physician reimbursements by about 5 percent in 2006 and subsequent years, something Congress is virtually certain not to allow.

Many stakeholders want to tinker with the SGR to produce higher reimbursements; for example, the American Medical Association has proposed taking the cost of prescription drugs out of the formula. Johnson, however, said she views a repeal of the SGR as "the only possibility."

In the SGR's place, Johnson would put a system based on "pay for performance," which would reward physicians who score well on quality measures. As part of an effort to emphasize prevention and wellness promotion, the Ways and Means Health Subcommittee chair also recommends paying physicians for interacting with patients through currently uncompensated methods - such as telephone and email.

Permanently "fixing" the SGR through either tinkering or wholesale reform would mean turning multiple years of reimbursement cuts into increases. Thus, many in Washington believe Congress will instead enact a temporary patch this year, in the same way that the Medicare Modernization Act of 2003 mandated 1.5 percent reimbursement increases in 2004 and 2005 without permanently changing the underlying SGR.

Johnson hopes to move forward this year despite the budgetary math, but she says she is most focused on getting the substance right: "If we get exactly the right bill  and we can't afford to do it this year, then at least we'll know what to fight for next year," she told reporters.