U.S. Sen. Chris Murphy has hailed the passage of legislation to enact what he calls a “permanent doc fix.” This major, bipartisan legislative plan repeals the Medicare Sustainable Growth Rate for physician reimbursement under Medicare and extends funding for the Children’s Health Insurance Program and community health centers nationwide.

The measure was signed into law on April 16 by President Obama.

Murphy, a Democratic member of the U.S. Senate Health, Education, Labor and Pensions Committee, celebrated the recent enactment with representatives from CT Voices for Children, the Connecticut State Medical Society and the Connecticut Association of Community Health Centers.

The current reimbursement schedule will now be replaced with a payment increase for doctors over the next five years. Medicare will transition to a new system that will stress quality, value and accountability. Existing payment incentive programs are now combined into a new merit-based incentive payment system and other alternative payment models will be created.

American Medical Association CEO Dr. James Madara told Kaiser Health News that “passage of this historic legislation finally brings an end to an era of uncertainty for Medicare beneficiaries and their physicians, facilitating the implementation of innovative care models that will improve care quality and lower costs.”
Madara added that patients now “will be able to get the care they need and deserve.”

Murphy has long supported this effort to pass these provisions into law. Over the last 12 years, the SGR, he argues, has created anxiety about potential cuts to physician reimbursement. The legislation staved off a 21 percent cut in payments to doctors, and ended years of instability for physicians who care for seniors and Medicare beneficiaries. The legislation also extends CHIP — which provides low-cost health coverage to 8.1 million children in the U.S. — by two years, and secures $7.2 billion in funding to community health centers and the National Health Service Corps.

Dr. John Rodis, executive vice president and COO of Hartford’s Saint Francis Hospital, said if doctors faced a 21 percent cut, it would create a significant shortfall in the ability for them to provide care.

Connecticut State Medical Society President Bob Russo said the pre-existing payment formula “froze doctors and hospitals in place. You can’t strategically plan when you don’t know what your business is going to be next year. It froze our capital budgets …”

“If this legislation hadn’t happened, programs would close, providers would have had to have been laid off,” said Kathy Yaccavone, president and CEO of Southwest Community Health Center “Hours of operation would have closed, and over 2,000 clients we currently serve would have lost access to care.”

However, the Association of Corporate Counsel’s Lexology sounded a somber note. Lexology is a web-based service that provides company law departments and law firms with free practical knowledge.

Citing Congressional Budget Office figures, Lexology predicted that these changes will cost the federal government and taxpayers $175 billion over the next decade.

Though it appears that physicians and other stakeholders in the healthcare industry will be better off, Lexology cautioned that “a careful analysis shows that physicians’ economic incentives will be vastly different in the future… Over time, changes in Medicare’s payment system could cause physicians to prescribe different or fewer drugs or order fewer laboratory and imaging tests.”