Physician payment formula update

The House approved legislation this week preventing the 21 percent Medicare payment cut, and fixing the overall payment formula.

The bill revamps the formula for basing payments on the sustainable growth rate, which has resulted in potential cuts to physicians for the last seven years. Each year, the Congress has stepped into stop the cuts, but have yet to fix the system.

This step is expected to cost about $210 billion over ten years. That fact, but that the Senate rejected a similar law, makes it unclear if this measure will actually become law.

The new target for payments would be the gross domestic product plus 1 percent. Preventive care and E&M services would be GDP plus 2 percent, according to American Medical News story.

Now the Senate can either take up the House bill or reconsider its own bill which foundered last month after some noted the bill would raise the federal deficit. WSJ blog notes that when the Senate bill failed, Sen. Reid said the Senate would go to a one-year fix instead.