The U.S. House of Representatives have passed H.R. 3961--the Medicare Physician Payment Reform Act of 2009. H.R. 3961 repeals the current Medicare physician payment formula--the sustainable growth rate (SGR)-- and replaces it with a new framework. The vote was 243-183. The majority were Democrats although Michael Burgess, MD, (R-TX), was the sole Republican to vote for passage.

Under H.R. 3961, the SGR would be replaced with a new formula in which only physician services, and not other services provided incidentally to a physician visit (such as laboratory services or drugs), would be counted in each category; the update for 2010 would be the percentage increase in the Medicare economic index (MEI), which is 1.2 percent; and the new SGR formula would take into account spending for each category of service since 2009 or, beginning in 2014, for the previous five years.

Beginning in 2011, there would be separate target growth rates and conversion factor updates for two categories of service: evaluation, management, and preventive services (services to grow at GDP plus 2% per year), and all other services (to grow at the rate of GDP plus 1% per year). In addition, the legislation allows Accountable Care Organizations (groups of physicians and possibly hospitals responsible for quality and overall annual Medicare spending for their patients) to have their own expenditure targets and updates for such practitioners, aside from reductions or increases applying elsewhere.

House Speaker Nancy Pelosi (D-CA) issued the following statement on the passage of the legislation: "Strengthening Medicare for generations to come is essential to our efforts to reforming health care for all Americans. This legislation will permanently improve the way Medicare pays physicians and in doing so, guarantee that America's seniors will continue to have access to excellent care through Medicare.

Association Support

"This legislation is a top priority for seniors and was endorsed by the AARP and the American Medical Association because it protects seniors' access to their doctor, promotes primary care, and offers incentives for doctors to provide patients with higher quality and more efficient care. Today's vote by the House keeps our promise to strengthen Medicare, never weaken it."

J. James Rohack, M.D. President of the American Medical Association released a statement on the passage, saying: "The U.S. House of Representatives passed legislation today that permanently repeals the broken Medicare physician payment formula that hurts access to care for seniors, baby boomers and military families. This vote is an important step toward ensuring a more stable and secure Medicare system for the patients it serves. The American Medical Association thanks the members of Congress who put patients above politics and voted yes on H.R. 3961, the "Medicare Physician Payment Reform Act of 2009."

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