House panel votes to change Medicare funding approach

A key House panel unanimously approved a bill on Wednesday that would replace the formula that pays physicians for each service provided under Medicare with one that rewards providers for high-quality care. The 51-0 vote by the Committee on Energy and Commerce sends the Medicare Patient Access and Quality Improvement Act to the full chamber.

The House bill would repeal the Sustainable Growth Rate (SGR) formula, which lawmakers override each year with a fiscal patch known as the “doc fix” — even when the formula calls for a cut, according to a Washington Times blog post. In addition to repealing the payment formula, the bill would establish a five-year transition period while a new incentive program is developed, during which providers’ payments would increase 0.5% per year to keep up with inflation.