House panel OKs revamping of physicians’ Medicare reimbursement formula

Bipartisan legislation designed to fix the existing Medicare formula for physician payments has been approved by the House Energy and Commerce Committee by a vote of 51-0.

The measure, H.R. 2810, would replace Medicare’s sustainable growth rate (SGR) with a more consistent and sustainable system for physician reimbursement, according to a committee announcement.

The bill “remedies this ailing physician payment system while encouraging the highest quality of care for America’s seniors,” Committee Chairman Fred Upton, (R-Mich.), said.

The measure provides a “statutory update” to physicians of 0.5% annually from 2014 through 2018. That would continue for providers in 2019 and beyond, with those practicing in fee-for-service receiving an additional increase based on performance quality under a new update incentive program. Qualifying providers could earn a 1% bonus, but low-performing providers would receive a 1% payment reduction.

The American Medical Association announced support for the reforms, but it “believes that more work is required … to address the potential complexity of a proposed quality system that could distract from more effective efforts to improve patient care.”

Other medical and physician groups generally reacted positively to the passage.