Medicare legislation repeals flawed physician payment formula, avoids cuts

Last night, the U.S. Senate voted 92-8 to repeal the sustainable growth rate formula that is used to calculate Medicare physician payment rates. The vote prevents a looming 21.2 percent cut for physicians and ends 12 years of perennial short-term fixes by Congress. The House passed the Medicare Access and CHIP (Children’s Health Insurance Program) Reauthorization Act of 2015 last month, also by an overwhelming margin. President Obama has said he will sign the bill into law.

In addition to preventing the payment cut and ensuring annual positive or flat fee updates for 10 years, the legislation, also known as MACRA, establishes new payment options that offer incentives to physicians who participate in alternative payment models. Those who remain in the fee-for-service system and meet certain performance benchmarks may also earn incentive payments.

MACRA also extends funding by two years for CHIP and other programs of importance to family medicine. Additional information about the legislation is available on the AAFP website, and additional details will be available as the regulations are developed.  

Posted on Apr 15, 2015 by Leigh Ann Backer