Congress Moves to Overhaul How Medicare Pays Doctors

Capitol Hill lawmakers are showing signs that they could finally revamp how Medicare pays doctors.

For the short term, the budget deal approved in the House on Dec. 12 delays for three months a cut of 24 percent in physicians' reimbursements slated to begin Jan. 1.

For the long term, after years of last-minute scrambling to stave off the payment cuts, several key Senate and House committees have approved legislation to repeal the formula that Medicare uses to pay physicians, also known as the Sustainable Growth Rate. The SGR was originally put in place in 1997 as a way to control Medicare costs. Doctors have long been upset that no permanent "doc fix" has been found, and that in turn has worried patients that doctors would stop seeing them.

"For far too long, seniors' health care has been jeopardized by drastic Medicare physician payment cuts that Congress has to fix year after year with piecemeal patches," said Sen. Orrin Hatch (R-Utah). "Republicans and Democrats in the Senate and the House have come together to once and for all put an end to this uncertainty by repealing this broken payment formula and replacing it with a smarter approach that rewards quality health care over quantity."

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The new system would tie Medicare reimbursements to quality and efficiency, which would be "good news for seniors and for the Medicare program overall," says Max Richtman, president of the National Committee to Preserve Social Security and Medicare.

But there is no done deal either for the long term or the short term.

Some Democrats say they won't support a short-term "doc fix" unless unemployment benefits for the long-term jobless are extended as well, according to National Journal.

Another - and perhaps bigger - obstacle: Lawmakers haven't yet agreed on how to pay for a permanent fix. The solution is unlikely to emerge before lawmakers soon return home for recess.

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