November 30, 2001

Bipartisan Legislation to Reduce Physician Payment Cuts Introduced

House Energy and Commerce Health Subcommittee Chairman Michael Bilirakis (R-Fla.) and Ranking Member Sherrod Brown (D-Ohio) Nov. 27 introduced the "Medicare Physician Payment Fairness Act of 2002" (H.R. 3351), a bipartisan bill that would reduce the 2002 cut to the Medicare physician payment conversion factor from minus 5.4 percent to minus 0.9 percent. Full Committee Chairman "Billy" Tauzin (R-La.) and Ranking Member John Dingell (D-Mich.) are among the bill's 46 original cosponsors.

The House legislation is similar to the Senate's "Medicare Physician Payment Fairness Act" (S.1707) which also reduces the 2002 cut from minus 5.4 percent to minus 0.9 percent. S.1707 is the updated and preferred version of an earlier physician payment bill (S. 1660). The AAMC strongly supports both H.R. 3351 and S. 1707.

H.R. 3351 also directs MedPAC to conduct a study on replacing or modifying the sustainable growth rate (SGR) used to calculate physician payment updates. The study would be due to Congress no later than March 2002. A preliminary estimate by the Congressional Budget Office reports that the 2002 cut reduction would cost up to $1.5 billion.

In a Nov. 28 press conference announcing the bill, Rep. Dingell stated "Our legislation will prevent these immediate, draconian reductions in payments for one year in order for MedPAC to study the matter." Other Commerce Committee members including Reps. Bilirakis, Brown, Tauzin, Greg Ganske (R-Iowa), Charlie Norwood (R-Ga.), and Lois Capps (D-Calif.) spoke in support of the legislation, expressing concern that the quality of care for Medicare beneficiaries would be in jeopardy if the cuts proceeded. In addition, Rep. Capps released a letter to Speaker Dennis Hastert (R-Ill.) with 138 signatures asking that the House take action to reverse the physician payment cut.

Information: Chris Mitchell, AAMC Office of Governmental Relations, 202-828-0526.