Health Care Team Discusses Medicare Physician Pay Fix

Ruzanna Harutyunyan's picture

Senate and House leaders and committee staffers have been discussing with members of President-elect Barack Obama's health care team the possibility of cutting $100 billion from the cost of permanently fixing Medicare physician payments by eliminating from the payment formula drugs administered by doctors, CongressDaily reports.

Under the sustainable growth rate formula, physicians face a Medicare payment reduction annually, but Congress typically passes a measure to avoid the cut. However, lawmakers next year hope to permanently eliminate the cuts, possibly by rebasing the SGR formula. The plan currently being touted by lawmakers would remove the cost of physician-administered drugs from SGR -- a change long-supported by doctor groups -- and "save Congress the task of finding a way to pay for the move," CongressDaily reports.


Removing physician-administered drugs from SGR would reduce the estimated $300 billion cost of permanently forgoing physician cuts by one-third. According to sources familiar with the issue, the best way to remove the drugs from the formula would be either by executive order or a CMS rule.

Congress plans to address the fix as part of an effort aimed at overhauling the health insurance system next year. A spokesperson for House Majority Leader Steny Hoyer (D-Md.) said, "With physicians facing an approximate 20% cut in reimbursements in 2010, it is clear that substantial reforms of Medicare payment policy are needed," adding, "We look forward to working with the Obama administration to develop policy that would yield such reform." Senate Finance Committee Chair Max Baucus (D-Mont.) in a white paper detailing his comprehensive health care proposal last month also proposed removing the drugs from SGR (Edney, CongressDaily, 12/9).

Reprinted with permission from You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at . The Kaiser Daily Health Policy Report is published for, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.



Democratic Party: Figure out how to make sure physicians continue to be paid well while eliminating stipulations such as pay-per-procedure and you've got a new voting pool for life..