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New House Bill Would Repeal Physician Update Formula
Republicans, Democrats agree upcoming cuts are unacceptable


Instead of seven lean years starting next year, you could receive guaranteed pay increases from Medicare, if one pending bill becomes law.

Rep. Nancy Johnson (R-CT), chair of the House Ways and Means Health Subcommittee, is drafting a bill that would repeal the Sustainable Growth Rate (SGR) formula which calls for cuts of nearly five percent over the next seven years. It also would require pay for performance (P4P) or "value-based purchasing."

Rep. Johnson's staff showed a draft of the bill to physician organizations and other advocates last week, and a final version may be released this week, says Piper Nieters, an attorney with Powers Pyles Sutter & Verville in Washington who saw the draft bill. The bill would set out positive updates for physician payments for the next few years, and then put in place a new formula for future updates based on actual physician cost data.

Physicians may welcome Johnson's version of P4P, which would give a greater role to specialty societies, says Nieters. Instead of appointing a central commission to come up with physician quality measures, the Johnson bill would ask each physician specialty group to submit recommendations for quality measures to an independent agency such as the National Quality Forum by March 1, 2006. The agency would then offer recommendations to the HHS Secretary.

Some physician groups did have a concern about this approach, notes Nieters. They claimed that the NQF already has a backlog in dealing with their quality recommendations. If the NQF or some other agency was unable to process their recommended quality measures quickly, then some physician specialties could find their quality measures left out of the final version, they worried.