On November 24, 2009, the U.S. House of Representatives passed the Medicare Physician Payment Reform Act" (H.R. 3961) which would repeal the scheduled 21% fee reduction scheduled for January 2010.  The legislation would also permanently replace the existing Sustainable Growth Rate (SGR) formula with a new formula that, according to the House summary:

  • Removes items such as drugs and laboratory services not paid directly to practitioners from spending targets;
  • Allows spending on most services to grow at the rate of GDP plus 1 percentage point per year (compared to GDP without any adjustment today);
  • Allows spending on primary and preventive care services to grow at GDP plus 2 percent per year; and
  • Encourages coordinated, innovative care by allowing Accountable Care Organizations to be responsible for their own growth paths, irrespective of reductions or increases that apply elsewhere in the system.

The bill is now on the Senate calendar for consideration.