House GOP drafts bill to revamp doctors’ pay under Medicare

House Republicans released a draft bill Tuesday to repeal the ill-defined way physicians are paid under Medicare in a bid to finally end the annual Capitol Hill scramble to find extra cash to pay the doctors.

The House Energy and Commerce Committee said it would scrap the sustainable growth rate formula, which was supposed to limit payments to doctors who treat Medicare patients but which lawmakers have deemed too draconian and have delayed each year for more than a decade.

The committee is proposing a set of incentives that would get away from paying for the number of tests doctors provide. Instead, doctors would choose how they want to be measured, and a portion of their payments would be tied to how well they perform against those criteria.

Under the House plan, health care providers would receive predictable rates for Medicare that are defined by law for a period, while the Department of Health and Human Services develops a new physician-payment system that’s based on the caliber of care that’s provided.

“Today, we take the next step forward in solving a problem that has been kicked down the road too many times,” said health subcommittee Chairman Joseph R. Pitts, Pennsylvania Republican.

Congress has circumvented the 1997 Medicare payment formula each year through the “doc fix,” a fiscal patch that maintains physicians’ payments from the government even when the formula calls for a cut. Early this year, lawmakers on Capitol Hill made it clear that eliminating the formula was on the top of their to-do list.

Senate Finance Committee Chairman Max Baucus, Montana Democrat, said this month that Congress had to repeal the sustainable growth rate and replace it with a more predictable, statutorily defined system before the end of the year. Other lawmakers agreed, noting the nonpartisan Congressional Budget Office recently dropped its estimated cost of repealing the formula — and paying doctors the current rate — from $245 billion over the course of 10 years to $138 billion.

Lawmakers involved in the reforms have emphasized getting the policy right before discussing how they will pay for freezing the rates. Although that important financial detail has not been settled, the draft bill is the first tangible step toward repealing the unpopular payment formula.

The committee has asked for feedback on the draft bill ahead of a hearing June 5.

Also on Tuesday, Health and Human Services Secretary Kathleen Sebelius published a blog post that said President Obama’s health care law is already driving down the number of patients who are readmitted to the hospital shortly after a previous stay.

“Today, we are focused on driving a smarter health care system focused on the quality — not quantity — of care,” she wrote.

Congress’ ability to find Medicare savings could reshape the bitter debate over the nation’s debt problem. Republicans have said entitlement reforms must be the precursor to any “grand bargain” that includes new revenues in the politically risky debate over the nation’s fiscal path.

Mr. Obama has said he is willing to take on Medicare and “push my Democratic friends to do hard things.”