WASHINGTON – In action just before the 109th Session of Congress ended, both houses passed bipartisan legislation addressing a number of end-of-session concerns, including the implementation of a quality reporting system for physicians and other healthcare professionals.

Omnibus legislation from Charles Grassley (R-Iowa) and Max Baucus (D-Mont.) was introduced on the Senate floor Wednesday and was passed after it was harmonized with similar legislation in the House of Representatives. The legislation addresses the extension of a variety of tax code, trade and health provisions.

Grassley is chairman of the Senate Finance Committee, while Baucus is the ranking Democrat.

The legislation seeks to establish a quality reporting system for eligible professionals using consensus-based quality measures, beginning July 1 and extending through December 31. Physicians and other eligible practitioners who submit data on applicable quality measures would receive incentive payments of 1.5 percent for covered services.

The quality reporting system is expected to be a boon for information systems, because teasing out quality information will be difficult and costly for physicians using paper-based systems, but fairly easy for physician practices that use information technology.

“The health package will stabilize access to doctors for Medicare beneficiaries, and it will move Medicare toward linking payment with quality,” Grassley said.

The legislation states that the information should be submitted in a form and manner specified by CMS. Quality measures beyond those in the Physician Voluntary Reporting Program would be determined at meetings that could begin as early as January. A final set of quality measures would be set by next November and become effective in 2008, the legislation says.

The legislation also eliminates an expected 5 percent cut in Medicare payment for physician services, instead maintaining rates at the same level. Federal law requires the use of a Sustainable Growth Rate formula to reduce overall Medicare payments to mitigate the combined growth in volume and intensity of physician services.

In November, the Centers for Medicare and Medicaid Services issued a rule setting the cut at 5 percent, approximately the 5.1 percent reduction called for under the SGR formula.

Physician associations have been pressuring Congress for months to eliminate the expected reduction in payments for 2007. Most had expected the 109th Session to end without a change to the payment reduction.

The proposed legislation also extends the Medicare Wage Index for six months, beyond its expiration date in March. Provisions of the wage index law provides extra Medicare payments to facilities that are technically in rural areas, but must compete for staff with nearby facilities that are classified as being in urban areas. The legislation also requires study of the Medicare wage index classification system and of potential alternative methods for computing the wage index.

The bill also codifies the maximum rate at which a state can tax its healthcare providers under their Medicaid plan at 5.5 percent through Fiscal Year 2011. Under current rules, the maximum rate is set at 6 percent, a rate likely to be reduced to 3 percent under an anticipated proposed rule.

This story was updated on Monday, Dec. 10, 2006 to reflect passage of the bill.