On Thursday, Senator Frank Lautenburg (D-NJ) announced that he will not seek re-election. Lautenberg, at 89 years old, is the oldest currently-serving U.S. Senator. Newark mayor Cory Booker (D-NJ) and Congressman Frank Pallone (D-NJ) have both been mentioned as potential front-runners for the seat’s Democratic candidacy.
CBO’s prediction this week of a lower cost for repeal of the Medicare sustainable growth rate (SGR) formula was viewed by lawmakers as an opportunity to engage in productive conversations and proposals to repeal and replace the flawed physician payment formula. According to CBO, the cost of repealing the Medicare sustainable growth rate (SGR) formula would be $138 billion over the next decade – a significant decrease from CBO’s November estimate of $244 billion and its $316 billion estimate last February.
On Wednesday, Congresswoman Allyson Schwartz (D-PA) and Congressman Joe Heck, D.O. (R-NV) introduced H.R. 574, the Medicare Physician Payment Innovation Act of 2013. The bill is similar to a measure the duo introduced last year, but does not include last year’s proposal to utilize savings from winding down spending in Iraq and Afghanistan to offset the cost of repealing the SGR. H.R. 574 would permanently repeal the SGR formula and replace it with an alternative value-driven fee-for-service formula. Payment levels would be sustained through 2014 followed by a five-year transition period to a new payment model, and providers would be allowed to voluntary test new models until a new model is effective in 2019. From 2015 to 2018, primary care physicians would receive a 2.5% annual rate increase while all other physicians would receive a 0.5% rate increase.
The Schwartz-Heck bill is similar to a proposal outlined by House Ways and Means Republicans last week. The proposal was revised this week after the release of CBO report. Other House Republican leaders including Energy and Commerce Committee Chairman Fred Upton (R-MI)and Energy and Commerce Health Subcommittee Chairman Joe Pitts (R-PA) announced their support for the framework which would implement repeal in the following phases:
- Phase 1: Repeal the SGR and provide a period of predictable, statutorily-defined physician payment rates;
- Phase 2: Reform Medicare’s fee- for- service (FFS) physician payment system to reward physicians who provide high quality care; and
- Phase 3: Build upon the improvements made in Phase 2 by also rewarding physicians who deliver efficient care.
The House Ways and Means and Energy and Commerce Committees are accepting feedback on the framework until February 25 at SGRComments@mail.house.gov . The Energy and Commerce Health Subcommittee will hold a hearing on Medicare physician payment next week on Thursday, February 14.
A summary of H.R. 574 is available HERE.