WASHINGTON – The Medicare Payment Advisory Commission (MedPAC) voted in early January in favor of a 1.1 percent increase in Medicare payments for doctors in 2009.
The vote comes as a precursor to the commission's March 1 annual recommendation to Congress.
Glenn M. Hackbarth, chairman of MedPAC, an independent federal body mandated to advise Congress on the Medicare program, said the recommendation was a difficult one to make and the process of determining the payment recommendation was "challenging at best."
"Our fundamental mission is to bring as much rigor and analysis and data to that process as we possibly can so that the Congress has the benefit not just of our recommendation on the specific number but also has the benefit of the information behind it," he said.
MedPAC has been using the same framework –the sustainable growth rate, or SGR formula –for making update recommendations for the last six years. Debates have typically followed as to whether the process is fair.
Hackbarth called MedPAC's current system reasonable, relying on a variety of data that includes cost reports, surveys of patient access and changes in quality of care and comparisons of Medicare payment rates with private sector payment rates. However, it is important for MedPAC to regularly review its approach, he said.
According to Hackbarth, MedPAC will be looking at ways to fundamentally change how it determines physician payment recommendations. A key in that process may be consideration of how efficient providers are, he said.
In December, Congress approved a bill, now signed into law, that would defer a 10.1 percent Medicare payment cut for physicians that had been scheduled to take effect January 1. The Medicare, Medicaid and SCHIP Extension Act of 2007 replaced the scheduled cut to the 2008 Medicare physician reimbursement rate with a one-half percent increase through June 30.
According to John Richardson, a principal policy analyst for MedPAC, the Extension Act does not change future fee schedule updates, which are currently projected to be negative every year through at least 2016 under the current SGR formula.
The 2007 Extension Act sets aside a new pool of funding of about $5 billion to be used for future physician updates.
"We anticipate that future legislation will further define exactly when and how this new funding would be applied," Richardson said. "But the important take-away at this point is to be aware of the fund's existence and Congress' stated intent to apply these funds to future physician updates."
The American Medical Association is urging a more permanent and substantial fix to physician payment rates, and Senate Finance Chairman Max Baucus (D-Mont.), sponsor of the Extension Act, said in December that it is time for Congress to make some bold moves to ensure Medicare beneficiaries have access to care.