Rep. Nancy Johnson Calls for Pay-for-Performance Medicare Reimbursement System for Physicians

House Ways and Means Health Subcommittee Chair Nancy Johnson (R-Conn.) on Tuesday at a hearing indicated that she will seek to replace the current "Sustainable Growth Rate" system used to determine Medicare physician reimbursements with a pay-for-performance system this year, CQ HealthBeat reports.

Johnson said that, although physician performance measures and systems to collect data on performance are not perfected, lawmakers must move to address the issue because of scheduled reductions in Medicare physician reimbursements over the next several years. Elimination of the SGR system "is the only possibility," Johnson said, adding, "It's unfortunate that we have to do this two years in advance of the technology."

Johnson also indicated that lawmakers could enact "a one-year fix of physician payment while a more permanent system is being designed," although she hopes to enact permanent revisions to the Medicare physician reimbursement system this year, CQ HealthBeat reports. She estimated that the replacement of a 1.5% reduction in Medicare physician reimbursements for fiscal year 2006 with a 1.5% increase would cost $11 billion over five years.

At the hearing, Jeffrey Rich of the Society of Thoracic Surgeons said a budget-neutral pay-for-performance system that provides higher Medicare reimbursements to some physicians at the expense of lower reimbursements to others could affect the quality of care for beneficiaries, reduce savings and prompt physicians not to share best practices (CQ HealthBeat, 3/15).