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House health reform bill first to tackle Medicare physician pay

Washington -- Upcoming cuts to Medicare physician rates would be expunged and the payment formula replaced with a modified system under a national health system reform proposal offered by House Democrats. The plan, in the form of an 850-page discussion draft, was unveiled June 19 by the three House committees with primary jurisdiction over health care -- Energy and Commerce, Ways and Means, and Education and Labor. It would start by erasing required pay cuts that have accumulated under the existing Medicare physician payment formula, the sustainable growth rate formula. After wiping the budgetary slate clean in 2010 by establishing a new SGR baseline and giving physicians a cost-based update for the year, a new system would launch in 2011 that could allow for positive rate updates going forward. Physician rates are currently cut across the board when annual spending on doctor services exceeds a target growth rate based on the nation's gross domestic product. Under the new system, spending would be allowed to expand based on a rate of the gross domestic product plus 2% for evaluation and management services and preventive care, and by the gross domestic product plus 1% for all other services. Certain items that are not paid for directly to physicians -- such as Part B drugs and clinical lab services -- also would be removed from the calculation of the formula, a move that would make it easier for doctors to avoid exceeding the spending targets. The American Medical Association praised the "tri-committee" bill for recognizing the need to avoid rate cuts by first rebasing the physician pay formula. But the Association did not immediately weigh in on the longer-term plan. "We continue to review the details of the bill, including the proposal to replace the SGR with two new target growth rates, to assess the implications for patients and the physicians who care for them," said AMA Immediate Past President Nancy H. Nielsen, MD, PhD. Democratic committee aides estimated that the Medicare provisions would cost less than $300 billion over 10 years. More money for primary care The higher target growth rate for E&M and preventive services is not the only boost to primary care included in the House Democratic proposal. Starting in 2011, the bill also would provide a 5% Medicare bonus for physicians considered to be in primary care specialties, including internal medicine, family medicine, general internal medicine, general pediatrics and geriatrics. Some physicians praised the provisions in the discussion draft. "The segregation of evaluation and management services into a separate bucket will favor primary care over specialty services, reversing the trend that has reduced primary care payment since 1992," Karl J. Ulrich, MD, president and CEO of Marshfield (Wis.) Clinic, said in a written statement. He testified June 25 before the House Energy and Commerce health subcommittee. But the American College of Physicians worries about replacing the payment formula with another one that is still so dependent on the gross domestic product, the group said in a statement. "The continued reliance on GDP -- especially given the current economic downturn -- even with an additional growth factor, could result in substantial future payment cuts to physicians, including in services provided by primary care physicians that are not included in the primary care/prevention category." The organization also wants to see the 5% bonus doubled. Fitzhugh Mullan, MD, professor of medicine and health policy at George Washington University in Washington, D.C., called for even more support for primary care physicians in June 23 testimony to the House Education and Labor Committee. A 5% bonus would translate into only about $2,500 more per year for the typical family physician, he said. "When faced with primary care to specialist payment gaps over $200,000, this primary care bonus is unlikely to influence future physician career choices," Dr. Mullan said. He added that a target growth rate of at least the gross domestic product plus 3% would be necessary to prevent harmful primary care cuts. Public plan talk still dominates Like other Democratic health system reform proposals, the House bill also proposes a public health insurance option that would compete with private plans as part of a new health insurance exchange. Incentive payments of up to 5% would be provided to physicians who participate in both Medicare and the public plan. "This public option will be self-supporting and will not receive ongoing subsidies from the federal government," said House Energy and Commerce Committee Chair Henry Waxman (D, Calif.). "This approach -- build on what works, fix what's broken and make sure people have choices -- is pragmatic and will produce the results the nation's health care system so desperately needs." Others on the committee and some witnesses who testified before the panel were not so supportive of the public plan option. "The consequences of the proposal are clear: a government takeover of our health care system complete with less patient choice, more government spending, increased taxes and rationing of care," said Rep. Phil Gingrey, MD (R, Ga.), co-chair of the GOP Doctors Caucus. "This bill represents only one side of the health care debate -- the government's side." Michael Leavitt, Health and Human Services secretary from 2005 to 2009, testified that the public health plan option would result in millions of employers abandoning the private insurance system. He suggested abandoning instead the public plan option and establishing state-organized exchanges rather than federally controlled exchanges. "Give states the task of solving the pooling problem, through mandates if they so choose, or without them if they choose a different course," Leavitt said. The committees hope to begin marking up the legislation soon after returning from the congressional July 4 recess. The full and original article can be found here:
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