Congressional leaders' proposal would phase out Medicare fee-for-service

A proposal by two Congressional leaders would gradually phase out fee-for-service Medicare payments to doctors, Bloomberg reports.

Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, and Rep. Dave Camp (R-Mich.), chairman of the House Ways and Means Committee,proposed a transition to an alternative payment method and a 10-year pay freeze for physicians. The plan would do away with the Sustainable Growth Rate (SGR), a formula that will reduce Medicare physician payments by nearly a quarter on Jan. 1 without Congressional intervention, according to Kaiser Health News.

Baucus and Camp's plan aims to incentivize shared-savings programs and bundled services through a single team. It would give a 5 percent annual bonus from 2016 to 2021 to doctors who derive "a significant share of their revenues" from the alternative methods, according to the Bloomberg article.

Physicians who used alternative payment systems after 2023 would receive a 2 percent reimbursement increase each year, Bloomberg noted, compared to a 1 percent annual increase for those who continue to use the fee-for-service model.

The proposal would also incentivize care coordination for patients with multiple chronic conditions, set up mechanisms to ensure the accuracy of payment for provider services and implement protocols for reducing "inappropriate care that harms patients," KHN reported.

"Enough with the quick fixes. Our proposal is for a new physician payment system that rewards value over volume," Baucus said in a statement, according to Bloomberg. "It will go a long way in improving the efficiency and quality of care for America's seniors."

The American Medical Association praised the draft from the two committees, with AMA president Ardis D. Hoven calling it "an encouraging development [that] represents a pivotal step toward stabilizing and improving the Medicare program on behalf of America's seniors and physicians," according to KHN.

A September report by the Congressional Budget Office found that doing away with the SGR would cost the federal government $175 billion by 2023, FierceHealthCare previously reported.

To learn more:
- here's the Bloomberg article
- read the KHN article