MedPAC Criticized for Suggested Changes to Physician Payment System

Some House lawmakers on Tuesday "seemed unimpressed" by the Medicare Payment Advisory Commission's report that was expected to make recommendations for overhauling the current Medicare physician payment formula, according to reports. The MedPAC report, released last week, includes two alternatives to the current system. One would eliminate the Sustainable Growth Rate formula that has been used for the past 10 years to calculate physician reimbursements. The report states that the elimination of the SGR formula should be tied to new incentives for physicians to provide better preventive care. A second alternative in the report would distribute physician payments on a regional basis tied to cost variations in medical services and reward physicians who provide more efficient care. Although MedPAC is divided on whether Medicare should continue to use a target level to calculate physician reimbursements, the report said that any target level should apply to all health care providers in Medicare, not only physicians. Energy and Commerce Health Subcommittee Chair Frank Pallone (D-N.J.) said that overhauling the SGR formula was a priority for the 110th Congress. "We want to make an effort to do something, if possible, this year, certainly within this session of Congress."