Medicare Funding: How New Legislation is Paving the Path toward Reform

Medicare Funding: How New Legislation is Paving the Path toward Reform image

New Legislation is Affecting Funding and Medicare Reform

Medicare funding has been the cause of much controversy in Washington. On Thursday December 12, 2013 the House of Representatives passed a two-year federal budget agreement. It extended Medicare’s current physician payment update of 0.5% through the end of March and avoids scheduled physician pay cuts of 23.7%.

The House passed budget bill addresses this issue of payments and also extends the Medicare-dependent hospital program, aimed at increasing payments to rural hospitals that serve a large Medicare population. It also includes provisions that affect the ambulance “add-on” payments, that increases base Medicare reimbursement rates on ambulance trips in both rural and urban areas.

These so called “doc fixes” patch up payment plans that continue to cause frustration for physicians. The Medicare Sustainable Growth Rate (SGR) is adjusted annually based on the previous years spending. This means that physician payments are subject to change each year. The American Medical Association and other lobbies continue to fight for a permanent doc fix to ensure these fluctuations in pay rates do not adversely affect the quality of service given to patients.

Steps are being made toward reform in Washington however. The House Ways and Means Committee unanimously approved SGR legislation that extends a 0.5% payment update through 2017 with stable payment levels through 2023. In 2024 new payment updates for Medicare professionals would be 1% while those with alternative payment options would see a 2% update.

Additionally, this proposed legislation would enhance physician incentive programs by creating a single, value based performance program that provides additional incentives for high performing physicians with payment increases. Meanwhile, the Senate Finance Committee passed SGR repeal legislation and is sending it onto the House for consideration.

This may all seem very far off but these changes are vital to the long term stability and viability of Medicare and its affiliated programs. Payment stability and consistency will prove invaluable into the future as a the need for long term care for acute conditions increases among other factors.

This new legislation is only the first step to Medicare reform required to ensure it’s viability into the future. For more information about these proposed changes and up to date news on the work being done in Washington on this issue visit:

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