Facing a 21% cut in Medicare payments in January, physicians, led by the American Medical Association (AMA), are urging the Senate to move on sustainable growth rate (SGR) reform.

The Senate is maneuvering on a bill that would repeal the SGR formula used to establish annual Medicare physician payment updates that is scheduled to go into effect in January.

Last Tuesday (October 13th) Senator Debbie Stabenow (D-MI) introduced Senate Bill 1776, the “Medicare Physicians Fairness Act”. The bill would repeal the SGR formula that is currently used and sets future updates at zero, a placeholder, so that a new payment formula can be negotiated.

What Stabenow and cosponsors, who include California Senator Barbara Boxer, hope to achieve is to reform Medicare physician payments. By resetting the budget base line, and eliminating the accumulated debt some of the barriers will be removed. At present, the debt level is $245 billion from Congressional amendments and ‘fixes’ over the past six years.

The bill must have the support of at least 60 senators on three procedural votes before it can even reach the floor of the Senate. The procedural votes include: a motion to end debate; a motion to waive a budget point of order because the measure is not offset in the budget; and a motion to proceed to the bill. Action on these motions is expected this week.

The American Academy of Family Physicians (AAFP) strongly supports the bill, saying in a statement that the annual Congressional fixes have to stop.

“[This bill] would mean that Congress can finally recognize that the annual overriding of the reductions is simply postponing the needed replacement of the payment formula,” says the AAFP. “It is critically important for Congress to face this responsibility and pass (this bill) this week.”

Congress must offset any increased spending for health care reform. Hence, if the more than $240 billion in accumulated SGR-related debt is not eliminated, that money would need to come from other health care programs or new revenue measures.

The Senate is only the first step, as the House of Representatives must also approve a bill. In the Senate, Republican leaders were not supportive of the bill, nor were some Democrats who favor reducing the federal deficit.

AMA Launches Campaign

In an effort to move Congress towards approving Senate Bill 1776, the American Medical Association began a nationwide television ad campaign late last week.

The AMA announced the multi-million dollar ads Thursday after Democrats agreed to push a $247 billion bill through the Senate this week, to avoid the scheduled cuts in Medicare fees. The ads say the bill will protect seniors’ access to care.