MD groups seek new Medicare rate formula

The current system Medicare used to gradually bump up reimbursement rates for physicians isn't fair, and should be replaced by one which takes physician practice costs into account, a group of 87 medical organizations told Congress. The group, which includes the American Medical Association, notes that hospitals and nursing homes are paid based on their costs. However, physicians are paid based on a formula known as the sustainable growth rate (SGR), tied to the U.S. economy, which has actually led to payment decreases in recent years. For 2008, in fact, physicians would be hit with a 10 percent cut in reimbursements under the SGR system. If the groups can't convince Congress to immediately repeal the SGR, they want Congress to eliminate it gradually, transitioning to a system under which physicians would get more money each year. The Congressional Budget Office has calculated that if physician payments were to climb as little as 2 percent per year, it would cost the federal government $262 billion over 10 years.

To learn more about the groups' proposals:
- read this Modern Healthcare article (sub.req.)

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