Rep. Dave Camp (AP photo/Pablo Martinez Monsivais)

Committees in the House and Senate are looking at ways to replace the repeatedly postponed Medicare “sustainable growth rate” (SGR) physician payment system.

The House Ways and Means Committee is going over an SGR fix measure — a “chairman’s amendment in the nature of a substitute to H.R. 2810″ — today at a markup.

The SGR system — created by the Balanced Budget Act of 1997 — is supposed to tie Medicare physician pay to growth in the U.S. gross domestic product. Congress has always put off letting the system take effect. If the system took effect in 2014, Medicare managers would have to cut the pay of the patients enrolled in the traditional Medicare program by about 24 percent, according to Centers for Medicare & Medicaid Services (CMS) estimates.

Rep. Dave Camp, R-Mich., the committee chairman, has proposed a bill that would focus solely on Medicare physician reimbursement and closely related matters, such as getting better quality information and encouraging doctors to take care of patients with chronic conditions by creating new Medicare chronic condition management reimbursement codes.

Camp would repeal the SGR system, provide a 0.5 percent payment increase through 2017, keep payments stable from 2018 through 2013, then provide an increase of 1 percent for all Medicare physicians in 2024, and a 2 percent increase for physicians in “alternative payment models” that seek to reward physicians who do a good job of providing efficient, high-quality care.

Meanwhile, at about the same time, the Senate Finance Committee will be marking up another draft, the chairman’s mark of the SGR Repeal and Medicare Beneficiary Access Improvement Act of 2013 bill.

The Senate Finance Committee’s chairman’s mark, developed by Sen. Max Baucus, D-Mont., would repeal the SGR system without creating a new physician pay increase schedule. Instead, the chairman’s mark calls for Medicare to focus on expanding and adding alternative payment model programs to pay more to efficient, high-quality physicians who move away from the fee-for-service payment approach.

The Baucus mark also includes other provisions, such as a continuation of funding for education programs that encourage adolescents to abstain from sex; funding for a commission on patient-directed health care; and funding for a health workforce demonstration project for low-income people.

Observers say an SGR fix bill may have some chance of overcoming congressional gridlock because Republicans and Democrats have been working together on SGR fix efforts in the House.

The Congressional Budget Office may have increased the odds Congress will act by cutting the projected cost of a SGR fix to less than $150 billion over 10 years, from about $300 billion earlier. 

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