MedPAC Issues Report to Congress on Physician Payment

On March 1, 2007, the Medicare Payment Advisory Committee (MedPAC) issued two reports to Congress impacting physician payment.

In its Report to Congress: Medicare Payment Policy, MedPAC recommended an increase in Medicare payments in 2008 based on practice cost inflation minus productivity growth, which would result in an estimated increase of 1.7 percent in the conversion factor. Currently, Medicare physician payments are scheduled to be cut an estimated 10 percent in 2008.

In its mandated March 2007 Report to Congress: Assessing Alternatives to the Sustainable Growth Rate, MedPAC suggests alternatives to the sustainable growth rate (SGR) methodology to determine Medicare physician payments.

The report proposes two pathways for Congress:

1. Repeal the SGR outright and refine the physician fee-for-service payment system to promote individual accountability, quality and efficiency and ultimately improve value
2. Refine the physician fee-for-service payments (as their first alternative), but replace the SGR with a new system of expenditure targets.

MedPAC also continues its call for policymakers to link payments to certain quality measures, and both pathways would include efforts to improve the value of care. AASM Government Affairs will closely monitor Congressional reaction to these reports.