By Emily Ethridge, CQ Roll Call
July 31, 2013 -- The House Energy and Commerce Committee unanimously approved a bill to replace Medicare's physician payment system last week, while at almost the same time Senate Finance Committee members huddled on crafting their own plan, expected this fall.
Senators leaving their closed-door meeting said they discussed goals and ways to proceed on legislation that would improve how Medicare pays physicians. They said that although the House has produced a bipartisan bill (HR 2810), the Finance panel is likely to introduce its own bipartisan measure sometime after the August recess.
"We definitely will be looking at what they've done, but putting together something that has bipartisan support in the Senate," said
Michigan Democrat Debbie Stabenow.
The Energy and Commerce Committee approved, 51-0, an amended version of its bill to repeal the sustainable growth rate (SGR) formula, which is detested by doctors, and institute an enhanced fee-for-service system as well as alternative payment models.
Committee leaders said they hoped House leadership would bring the bill to the floor this year.
"Today's vote is an important milestone, but we are all resolved to achieve reform in a fiscally responsible manner, and despite our significant progress, we will not be satisfied until the ink is dry on the president's signature," said committee Chairman Fred Upton, R-Mich., in a statement.
If Congress does not act to avert the cuts, physicians will see their payments reduced by nearly 25 percent on Jan. 1. The measure under consideration in the House would make a permanent change in the system so that the annual threat of payment reductions would be eliminated.
Although the House bill has broad bipartisan support, members emphasized that it is not yet finished. For one, it still lacks an offset to what is likely to be a large price tag. The Congressional Budget Office has found that repealing the SGR for 10 years would cost $139.1 billion.
The House Ways and Means Committee, which has jurisdiction over a number of relevant offsets, may choose to take up the Energy and Commerce bill in the fall and add a pay-for.
In the Senate, West Virginia Democrat Jay Rockefeller said he offered an idea during the meeting on how to pay for the bill—his legislation (S 740) to require drug companies to provide rebates to the federal government on drugs used by beneficiaries eligible for both Medicare and Medicaid. The Congressional Budget Office found that the bill would save $141.2 billion over 10 years.
Rockefeller said he wasn't sure how his idea was received during the meeting. When asked if there were other proposals discussed, he joked, "Yeah, but none as good."
Despite the uncertainty over the offset, many stakeholders and lawmakers support the House bill's underlying structure, which would provide a period of stable payments before transitioning physicians into either an improved fee-for-service system with increased data reporting or approved alternative payment models.
During the five-year transition period there would be annual payment updates of 0.5 percent, to give providers time to test quality measures and improvement activities.
Senate Finance Committee members said they were still focusing on what kind of structure to put in place to replace the SGR.
"Obviously fixing the SGR is the main objective here," said John Thune, R-S.D. "But we also want to look at what we can do in terms of policy to create a new system that actually works better and rewards value. And so how far we can get into that remains to be seen. And then, you know, the question of how do you pay for it."
Maryland Democrat Benjamin L. Cardin said lawmakers and their staffs were working in two general areas: how to deal with promoting the value of services over volume, and how to deal with Medicare's relative value scale, which is used to determine doctors' payments for their services.
"The two areas that we've identified is how do you deal with managing care better, particularly high-cost interventions, and how do you determine the relative value of physician services, and the current system has not been working in either case," Cardin said.
Cardin added that while he was disappointed Medicare was not further along on alternative ways of reimbursing care delivery, a payment system replacement would need to include some transition time for providers to adjust.
Provider groups praised the House panel for approving legislation that moves toward an end to the SGR. Norman E. Vinn, president of the American Osteopathic Association, said in a statement that the measure "puts a permanent end to years of annual patches that freeze payment levels, impede access to quality health care, stifle innovation and are simply no longer financially viable."