The proposed fix still must be paid for, requiring lawmakers to come up with as much as $150 billion in savings from elsewhere in the budget.
But there is optimism on Capitol Hill that the federal government will finally replace a dysfunctional 17-year-old system designed to control Medicare spending by limiting annual increases in physicians' reimbursements. That system was widely seen as broken, and year after year,
Speaking to reporters Thursday, House Speaker
Senior lawmakers who worked on the deal acknowledged that paying for the fix remains challenging. But the proposal has the crucial support of senior Democrats and Republicans on key committees, including the
Under the proposal, the old limits would be ditched, and fees would increase 0.5% annually over the next five years.
More important, Medicare would move away from paying doctors for each procedure they perform. Instead, the federal insurance program for the elderly would increasingly pay physicians based on their performance, rewarding doctors who hit quality targets and whose patients got healthier.
Many health experts and physicians' groups believe that his will create incentives for improving care and controlling costs. Several leading medical groups applauded the deal.
"This legislation is the product of months of unprecedented bipartisan, bicameral work to reach this landmark agreement," said Dr. Ardis Dee Hoven, president of the American Medical Assn.
The old system, known as the sustainable growth rate, was particularly galling to many doctors because each time Congress ignored the fee limits, it often spurred an eleventh-hour search for money to offset the cost. During that time, physicians faced the prospect of deep cuts in Medicare fees that would have been required by the formula.