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National Intelligence Report

Push Is on to Overhaul Medicare Physician, Lab Payments
August 13, 2008

Pathology and other physician groups want Congress to repeal the SGR system for physician fee updates, while some lab groups back development of a resource-based alternative to the lab fee schedule

While Congress just enacted Medicare legislation canceling a physician fee cut and repealing lab competitive bidding, lawmakers have already been put on notice that physician and clinical laboratory groups will be pushing next year for fundamental changes in the methods that Medicare uses to pay for their services.

The Medicare law enacted July 15 approved a short-term fix that cancels any cuts in physician fee schedule payments under the update formula and grants a 0.5 percent fee increase through 2009. But the medical community is united in urging Congress to devote next year to devising a permanent solution before more cuts kick in again in 2010.

The College of American Pathology, the American Society for Clinical Pathology, and other physician groups advocate repeal of the Sustainable Growth Rate (SGR) update system that has triggered fee cuts for most of this decade and want to be involved in developing a legislative alternative.

Overhaul of the Part B lab payment method is also on the table, with the recent introduction of legislation, backed by the American Society for Clinical Laboratory Science and the Clinical Laboratory Management Association, to revamp the lab fee schedule based on value, resources required, and geographic cost variations.

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