Powerful panels go for permanent 'doc fix'

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Committee leaders in the House and Senate have unveiled bipartisan legislation repealing Medicare's flawed physician payment system and giving doctors in the program a small pay raise.

The bill to create a permanent "doc fix" was introduced Thursday after more than a year of negotiations between parties in both chambers. Its central provisions repeal Medicare's sustainable growth rate formula and increase physician reimbursement rates by 0.5 percent annually for 5 years.  

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Top lawmakers from both parties praised the deal as a major victory for doctors and seniors.

"Congress has spent a decade lurching from one ‘doc fix’ to the next, creating a new, unnecessary threat to seniors’ care each time. Enough is enough," Senate Finance Committee Chairman Max Baucus (D-Mont.) said.

"This proposal would bring that cycle to an end and fix the broken system. Our bill makes Medicare’s physician payments more modern and efficient, and it will protect seniors’ access to their doctors."

The announcement comes just two months before Medicare doctors face a payment cut of almost 24 percent.

Congress has relied on temporary "doc fixes" for more than a decade to avoid dramatic pay cuts to doctors, but hope for reform rose last year after budget analysts unexpectedly cut the cost of repeal.

The American Medical Association (AMA), which has spent years lobbying to repeal the sustainable growth rate (SGR), welcomed the measure and urged both chambers to pass it before the next payment cut hits doctors on April 1.  

"Continuing the cycle of short-term patches by merely addressing the 2014 cut that is imminent on April 1 without solving the underlying problem would be fiscally irresponsible and further undermine the Medicare program," AMA President Ardis Dee Hoven said in a statement.

"It is time for action to repeal the SGR and establish a transition to a new more stable Medicare physician payment policy to better serve America’s senior citizens."

The endorsement of three powerful committees — Senate Finance, House Ways and Means and House Energy and Commerce — makes it likely that leaders in both chambers will bring the bill to the floor this spring.

This assumes lawmakers can come to an agreement about how to pay for the reform, estimated to cost between $120 billion and $150 billion. Offsets were not announced Thursday and have already proven a major sticking point.

Healthcare sectors are bracing for the possibility of further cuts, and lobby groups continued to position their members Thursday in response. In one example, long-term care providers urged Congress to accept their offer to generate revenue by lowering hospital readmission rates.

“Our profession has policy solutions that create incentives for providers that can not only contain costs, but also improve quality of care," said American Health Care Association President Mark Parkinson in a statement.

"With skilled nursing providers already operating on thin margins, across the board cuts to our providers are not the answer."

The bill's pay raise for physicians is designed to help them transition to a new system that changes Medicare's fee-for-service model.

New programs established under the measure will seek to reward quality of care, incentivize new payment models and ensure greater transparency for Medicare patients.

This story was updated at 4:15 p.m.