In a recent letter to health letter to health care providers, Senators Max Baucus (D-Mont.) and Orrin Hatch (R-Utah) sought input on how to permanently replace the sustainable growth rate (SGR) formula. Congress routinely has passed legislation to delay cuts called for by the SGR, but physicians face substantial reductions in their Medicare reimbursements each time the “doc fix” expires. The most recent doc fix delayed the cuts until January 1, 2014, at which time physicians face about a 25% reduction to Medicare reimbursement rates.

In February, the Congressional Budget Office’s budget projections dramatically reduced the cost for eliminating the SGR from about $300 billion over 10 years to $138 billion over 10 years. The reduced estimate made physicians optimistic that Congress would finally permanently repeal the SGR, a move that it had avoided in the past because of the high cost.

In the letter, the senators are seeking responses to three questions:

  1. What specific reforms should be made to the physician fee schedule to ensure that physician services are valued appropriately?
  2. What specific policies should be implemented that could co-exist with the current FFS physician payment system and would identify and reduce unnecessary utilization to improve health and reduce Medicare spending growth?
  3. Within the context of the current FFS system, how specifically can Medicare most effectively incentivize physician practices to undertake the structural, behavioral and other changes needed to participate in alternative payment models?

Comments are due by May 31 and can be submitted to