Hill Plan Would Shift Medicare’s Doctor Payment System To Reward Quality

The bipartisan leadership of three Senate and House committees introduced legislation Thursday to overhaul the way Medicare pays physicians.

The package, which does not specify how it would be paid for, would repeal the current system, which sets Medicare physician payment rates through a 1997 formula based on economic growth and known as the "sustainable growth rate" (SGR).  Physicians would receive a 0.5 percent increase for each of the next five years as Medicare transitions to an alternative payment model designed toreward physicians based on the quality of care provided, rather than the quantity,  as the current payment formula does.

The bipartisan leadership of the Senate Finance and House Ways and Means and House Energy and Commerce panels announced the deal -- as the Senate was expected Thursday to confirm Finance Chairman Max Baucus to become the next U.S. Ambassador to China. Baucus had made the SGR fix a top policy priority and had hoped to wrap up a deal before his departure.