House repeals 21.2% physician rate cut, SGR formula

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The U.S. House of Representatives voted Thursday to pass H.R. 3961, the Medicare Physician Payment Act, 243-183, altering the way Medicare pays physicians and preventing a scheduled 21.2 percent rate decrease set to take effect on Jan. 1, 2010.

This bill, if passed in the Senate, will repeal the sustainable growth rate (SGR) formula and provide a Medicare Economic Index update for 2010, instead of the proposed 21 percent Medicare physician payment cut.

The legislation would eliminate all SGR debt accumulated over the years because of temporary, unfunded fixes. It also would establish updates based on two new targets with significantly higher spending growth allowances than the SGR.

“This vote is an important step toward ensuring a more stable and secure Medicare system for the patients it serves,” said J. James Rohack, MD, president of the American Medical Association (AMA).

“The AMA urges the Senate to act quickly before the cut begins on Jan. 1,” according to Rohack. “Fixing the Medicare physician payment formula once and for all is an essential element of comprehensive health reform. Congress needs to fulfill its current commitments as it considers expanding its obligations.

The Senate failed to advance similar legislation-- The Medicare Physician Fairness Act-- last month on a procedural vote.