A bipartisan bill introduced in the House yesterday would avert a Medicare pay cut of roughly 30% in 2013 by repealing the program's sustainable growth rate (SGR) formula. It also would phase out its fee-for-service payment system.

The ambitious plan has garnered loud applause from organized medicine, but its prospects of passage look cloudy in a hyper-partisan presidential election year, especially in light of its price tag. The bill, sponsored by Rep. Allyson Schwartz (D-PA) and Rep. Joe Heck, MD (R-NV), would cover all these costs with future savings from the military pull-out from Iraq and Afghanistan. The Schwartz-Heck bill lays out a complicated timetable for reforming Medicare's system for paying physicians:

• In 2013, reimbursement rates would remain at 2012 levels.
• From 2014 to 2017, Medicare would raise rates by an annual 2.5% for primary care, preventive, and care-coordination services. Rates for all other physician services would increase by 0.5% annually. The differential represents an attempt to emphasize primary care over procedure-oriented specialty care.
• In 2018, new payment models that reward physicians for "high quality, high value care" as opposed to the volume of services will make their debut. These new models will build on Medicare demonstration projects now underway for accountable care organizations, medical homes, and shared savings. Because 2018 is considered a transitional year, Medicare will continue to pay physicians on a fee-for-service basis, but only at 2017 levels.
• Beginning in 2019, physicians who stick with fee-for-service reimbursement will suffer pay cuts: 2% in 2019, 3% in 2020, 4% in 2021, and 5% in 2022. Fee-for-service rates will remain frozen at 2022 levels in the years beyond. In contrast, physicians participating in the new payment models "will continue to receive stable reimbursement" with the opportunity to earn even more based on their performance. (Medscape)

Source: Physician's News