Replace the current sustainable-growth- rate (SGR) formula for setting Medicare physician rates with a multiyear, three-phase move to a new payment method.
 
That’s one of several Medicare reform ideas endorsed by Republican members of the House Energy and Commerce Committee. Both parties have expressed support for the idea and it was included in several deficit reduction proposals, though not in President Obama’s fiscal 2014 budget proposals.
 
If Congress doesn’t act, it will be the same old threat: A dramatic drop in physicians’ payment rates on Jan. 1 this time a more than 24 percent cut. DecisionHealth is expecting the proposed physician fee schedule any day now and you'll find coverage of the rule in Part B News when it drops.
 
Some of the changes the committee’s Republicans have in mind include: 
  • Create a single, uniform deductible for services provided under Medicare Parts A and B.
  • Cap beneficiaries’ out-of-pocket expenses as a way to provide catastrophic coverage for beneficiaries.
  • Possibly ask wealthier beneficiaries to contribute more for premiums. Beneficiaries with annual incomes over $85,000 currently pay higher premiums for Medicare Parts B and D. Obama’s fiscal 2014 budget plan calls for raising them further.
Earlier this year, Republican leaders of both the House committees with authority over Medicare - Energy and Commerce and Ways and Means – described themselves as unified on legislation to replace the sustainable growth rate formula.
 
The intention of the Energy and Commerce Committee is to vote out a bill “before the August break,” Chairman Fred Upton told reporters, though the Ways and Means Committee may not move that quickly. Ways and Means has direct jurisdiction over a number of potential payment offsets, which likely won’t be decided until much later this year when Congress considers debt limit legislation, the newsletter CQ Daily reported. If there are any differences over policy and “pay-fors” to offset the cost of scrapping the SGR formula, Upton and Camp aren’t talking about them publicly.
 
In the Senate, Finance Committee Chairman Max Baucus, (D-Mont.), has indicated an income tax overhaul would be his choice of payment for the SGR fix. But a more likely place for Congress to find offsets for an SGR fix is payments to home health agencies, rehabilitation and skilled-nursing facilities and long-term-care hospitals. “Double-digit Medicare margins in several post-acute settings indicate that Medicare payments far exceed costs,” Washington Rep. Jim McDermott, a Democrat, said at a recent Ways and Means Health Subcommittee hearing.