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Last year in a failed legislative effort to end the sustainable growth rate (SGR) formula that governs Medicare fees, Congress reached agreement on statutory language to move Medicare’s payment of physicians away from fee-for-service (FFS) to so-called value-based payment. Authors of this paper, who include a former Administrator of the Centers for Medicare and Medicaid Services and two former Vice-Chairs of the Medicare Payment Advisory Commission, have specific recommendations to improve this legislation, now being reconsidered. The recommendations are in three major categories: encouraging movement to effective alternative payment models, improving Medicare’s physician FFS payment system and improving and simplifying the quality measures that would be used.