Congress Poised To Permanently Fix Its Medicare Payment Glitch : Shots - Health News After a decade of kicking the ball down the road, Congress appears ready to repeal its payment formula for Medicare and replace it with a whole new system. This time, doctors would be paid according to the quality of results they produce, rather than the number of services they provide.
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Congress Poised To Permanently Fix Its Medicare Payment Glitch

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Congress Poised To Permanently Fix Its Medicare Payment Glitch

Congress Poised To Permanently Fix Its Medicare Payment Glitch

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The budget deal approved by the Senate yesterday includes something very familiar: legislative language that appears every year. It's aimed at averting a steep pay cut to doctors who treat Medicare patients. But as NPR's Julie Rovner reports, this time might be different, because Congress may soon actually solve the problem.

JULIE ROVNER, BYLINE: The Medicare doctor payment problem was actually created by Congress itself, back in 1997, through a flawed formula called the Sustainable Growth Rate, or SGR. And every year since 2002, that SGR formula has created both a political and a fiscal problem, said Senate Finance Committee Chairman Max Baucus of Montana.

SENATOR MAX BAUCUS: The SGR has threatened to make draconian cuts to physician payments, cuts that could cause seniors to lose access to their doctors. And every year, Congress has had to spend more time and money to pass temporary fixes.

ROVNER: Indeed, the so-called Medicare doc fix, unlike the Affordable Care Act, is one of the few health issues that has enjoyed near unanimous bipartisan agreement. Neither Republicans nor Democrats have had the stomach to allow pay cuts that, in recent years, would have topped 20 percent. Yet no matter which party has been in charge, the annual - and sometimes monthly - exercise to cancel the cuts has been a painful one.

Utah Senator Orrin Hatch is the finance committee's ranking Republican.

SENATOR ORRIN HATCH: Since 2003, we've had to patch the SGR 15 times, at a total cost of $150 billion.

ROVNER: The current patch cancels a scheduled 24 percent cut in doctor pay, at a cost of around $7 billion, and just for three months. But that's because this Congress - now famous for doing almost nothing - is poised to do something significant. It appears ready to repeal the flawed payment formula and replace it with a whole new system, one that pays doctors according to the quality of results they produce, rather than the quantity of services they provide.

ARDIS HOVEN: I'm optimistic. We're optimistic.

ROVNER: Ardis Hoven is president of the American Medical Association, which has led the charge to fix the formula.

HOVEN: I think the prospects of repealing the SGR and replacing it with an appropriate payment mechanism are very good.

ROVNER: Indeed, all three committees in the House and Senate that oversee the Medicare program have now approved legislation to overhaul Medicare's doctor payment system. In the normally more partisan House, the votes on the bills were unanimous. But that's not to suggest that this is a done deal. For one thing, while physician groups are united in their opposition to the current payment system, they don't all agree on the details of the bills that are emerging.

The bill approved by the Senate Finance Committee, for example, has drawn the opposition of the American College of Surgeons. David Hoyt, the organization's executive director, says one big problem is that the bill would freeze physician pay for a decade.

DAVID HOYT: To really send the message to physicians that things are going to be frozen for 10 years just doesn't seem like an appropriate policy issue.

ROVNER: But even more troubling, he says, is that the bonuses some doctors could earn under the proposal for performing well would come at the expense of other doctors, even if those doctors performed well, too.

HOYT: And what this does is it potentially disincentivizes physicians from sharing best practice with each other, improving care together, rather than competing with each other. We don't think that that's a good policy at a time when we're trying to get more consistency in care.

ROVNER: Even if those issues can get worked out - and most people think they will - there's another thorny issue: how to pay the estimated $136 billion cost of eliminating the SGR. Most of the previous doc fee fixes - including the one in the budget bill passed yesterday - have been paid for by cutting payments to other Medicare providers, usually hospitals.

But Chip Kahn of the Federation of American Hospitals says that while hospitals strongly support a permanent repeal of the SGR, his industry is tired of being the piggy bank.

CHRIS KAHN: And if that has to come from other providers, where we see robbing Peter to pay Paul, they're just creating one problem, trying to solve another.

ROVNER: Kahn says Medicare doctor pay is not a health care problem, but a fiscal problem created by Congress. And if Congress insists on offsetting the cost, they should do it without penalizing either health care providers or Medicare patients. Lawmakers will now have three months to figure that out, or else they'll have to pass a 16th doc fee fix. Julie Rovner, NPR News, Washington.

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