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Capitol Health Call
April 11, 2007

Medicare Physician Payment

JAMA. 2007;297(14):1541. doi:10.1001/jama.297.14.1541-a

Calling the situation “grim,” Rep Frank Pallone, Jr (D, NJ), chairman of the House Energy and Commerce Subcommittee on Health, asked Congress to revamp Medicare's physician payment formula.

Pallone made his comments during his committee's March 6 hearing of the Medicare Payment Advisory Commission's report, which called for eliminating the sustainable growth rate (SGR) formula. The SGR formula currently suggests a 10% cut in physician reimbursements next year and a 40% total decrease during the next 8 years. The advisory commission advised that elimination of the SGR formula should be tied to new incentives for physicians to provide improved preventive care. Another alternative for physician reimbursement suggested by the commission would distribute payments based on geographic cost variations in medical services and reward physicians practicing more efficient care.