Senate Committee Inches Closer to Introducing Physician Payment Legislation

The Senate Finance Committee is still crafting legislation that would negate steep cuts in Medicare physician payment rates in 2008 and 2009 now required by the sustainable growth rate, or SGR, formula.

Senate Finance Committee members were planning to introduce the legislation in mid-October, but they still are working on some of the finer points of the bill, trying to draft legislation that Congress will approve, said Kevin Burke, director of the AAFP Division of Government Relations.

"They will introduce it when they feel they have the votes to pass what they have written," said Burke. "Right now, they are bargaining for different parts of the bill."

The soon-to-be-released bill would provide a multiyear physician payment fix by preventing a scheduled 9.9 percent reduction in Medicare payments in 2008 and a 5 percent cut in 2009, according to Burke. It still is not clear whether the legislation will provide a slight increase in physician payments during the next two years or whether it will call for a payment freeze.

"Congress wants this to cost as little as possible," said Burke. "It is a zero sum game. They will have to take money from other parts of the budget to pay for this initiative."

Burke acknowledges, however, that the measure "may not help a lot of physicians if does not include a payment increase."

The Senate Finance Committee's bill also may provide for a national patient-centered medical home demonstration project similar to that included in a House bill to reauthorize the State Children's Health Insurance Program, or SCHIP, that passed in late September. The House SCHIP bill included a provision to fund a three-year medical home demonstration project that would allow as many as 500 medical practices to participate. That House bill also provided for 0.5 percent increases in physician payment rates in both 2008 and 2009, in addition to the multiyear physician payment fix.

The Senate earlier had passed SCHIP legislation that did not include the additional provisions contained in the House measure.

House and Senate conferees stripped both provisions from the final SCHIP bill passed by Congress; but there now is a "good chance" the Senate Finance Committee will incorporate the medical home measure, Burke said.