Congress Should Provide Multi-Year Physician Pay Update, Says Texas Lawmaker

Congress should adopt a two-year physician payment update under Medicare to give lawmakers enough time to develop a viable alternative to the sustainable growth rate, or SGR, formula, said a Texas congressman in a recent interview with AAFP News Now.

"A one-year fix does not give us enough time to thoroughly debate and adopt something," said Rep. Charles Gonzalez, D-Texas, a member of the House Committee on Small Business and chair of its subcommittee on Regulation, Health Care and Trade. "I think we could do it in two years. I know some people would love an overnight fix, but I don't think that is going to happen."

The SGR uses a formula to align actual spending rates with specified targets to determine Medicare payment levels, and, during the past six years, Medicare spending has exceeded targeted rates, triggering steep reductions in payments to physicians that have been averted only by last-minute congressional intervention.

In 2008, use of the SGR will cause a 10.1 percent reduction in Medicare payment rates, followed by a 5 percent reduction in 2009, unless Congress acts. Lawmakers currently are working to block the cuts and likely will adopt a one-year update because it is less expensive than a two-year update. Without a two-year update, however, Congress will be back in the same position next year of trying to find the offsets needed to block the cut and pay for a positive physician update , Gonzalez said.

A two-year update, he said, would give physicians more stability as Congress develops an alternative to the SGR. "Physicians need to know what monies are going to be coming in as they begin to transition to another payment model," Gonzalez said.

Gonzalez said he does not know when Congress actually will replace the SGR, but he is convinced that electronic health records, or EHRs, will play a role in the new Medicare payment system.

"I think (EHRs) are going to be a component as we move forward in trying to find the answer as to what is the best way to fairly and reasonably compensate health care providers," he said.

Gonzalez is the chief sponsor of H.R. 1952, (at the THOMAS Web site, type "HR 1952" in the search box after selecting "Bill Number") a bill that would create a national health care information infrastructure by providing incentives under Medicare for "small medical care providers" -- practices or entities that employ an average of 10 or fewer full-time equivalent staff -- to acquire EHR systems and other health information technology, or HIT.

"We have to be ready with a system out there and standards that physicians are going to feel comfortable with," said Gonzalez.

The convergence of certain trends, such as pay-for-performance and a shift from an acute-care treatment model to more holistic treatment of patients, will accelerate the move to EHRs and other HIT, in general, Gonzalez predicted.

The best way to accommodate this shift in the treatment paradigm is through HIT, which allows providers to centralize, maintain and monitor information as the source for patient treatment, he said. Not surprisingly, Gonzalez is a proponent of the patient-centered medical home, calling it an "excellent idea" and a "sound concept."