House GOP leaders have taken another step toward repealing the sustainable growth rate formula feature of Medicare’s current physician payment system and replacing it with one based on quality of care and new models of care.  

The House Energy and Commerce Committee June 28 released a second legislative draft of a new Medicare physician payment system that puts forth several possible policy options for paying doctors based on adherence to quality measures. Under the proposal, doctors would have the option of leaving fee-for-service Medicare and opting for new models of delivering care.   

The committee is planning to mark up the legislation in July. The Ways and Means Committee also is involved in crafting legislation. A major stumbling block to finally getting action on a permanent doc fix remains, however: how to pay for it. While the Congressional Budget Office has lowered the cost of freezing physicians’ payment to “only” $138 billion over 10 years, lawmakers have yet to publicly commit to any payment offsets. Physician sources say that finding funding sources that Democrats and Republicans both can support will be difficult. Cutting Medicare reimbursement to nursing homes and home health agencies may find bipartisan support, but that alone would not be enough to pay for a doc fix.  

Congress for the last decade has passed a series of short-term fixes. Physicians’ Medicare reimbursement will be cut about 25 percent in January 2014 unless Congress again intervenes.