Bipartisan SGR repeal bill introduced in Congress

Leaders in the House and Senate Thursday introduced legislation that would repeal Medicare’s Sustainable Growth Rate (SGR) formula and avoid a 21.2% reimbursement reduced scheduled for April 1.

The legislation—called the "SGR Repeal and Medicare Provider Payment Modernization Act"—would increase physician reimbursement by 0.5% annually from 2015 through 2019, while rates in 2019 would be maintained through 2025, with physicians having the opportunity to receive additional payment adjustments through the Merit-Based Incentive Payment System. In 2026 and the following years, professionals participating in alternative payment models that meet certain critieria would receive annual updates of 1%, while other professionals would receive annual updates of 0.5%.

According to a release from the House Energy & Commerce Committee, the legislation will also:

• Improve the fee-for-service system by streamlining Medicare’s existing web of quality programs into one value-based performance program. It increases payment accuracy and encourages physicians to adopt proven practices.
• Incentivize the use of alternative payment models to encourage doctors and providers to focus more on coordination and prevention to improve quality and reduce costs.
• Make Medicare more transparent by giving patients more access to information and supplying doctors with data they can use to improve care.

According to press reports, the bill—crafted by House Speaker John Boehner and Minority Leader Nancy Pelosi—is part of a $200 billion package that will also also extend funding for two years for the Children’s Health Insurance Program, which is scheduled to expire in September.

Last year’s attempt to repeal the SGR failed when lawmakers couldn’t come up with a way to pay for it. According to a report in Politico, about $70 billion of the total package will be offset by spending cuts, which will include cuts to health care providers such as hospitals, acute-care providers and insurers, as well as cuts to Medicare beneficiaries (such as through means-testing for high-income seniors). An article in Medscape News reports that an amendment including details of that $200 billion package will be attached to the legislation in the House in the coming days.

The action by Congress comes days after hundreds of medical associations in a March 16 letter to Boehner urged Congress to build on last year’s efforts to repeal the “failed” SGR formula. 

“Last year’s efforts to reform the Medicare physician payment system far exceeded previous attempts to repeal the flawed SGR formula,” the letter stated. “Through months of hard work, a policy was developed that won not only bipartisan congressional support but also widespread support from organized medicine. That proposal would not only eliminate the dysfunctional SGR formula, but also create new pathways for physicians to participate in alternative payment and health care delivery models that emphasize value over volume and have the demonstrated potential of reducing long-term spending growth across the Medicare program. These policies represent the most significant structural reforms to the Medicare program in many years and replicate many of the opportunities for maximizing quality and reducing costs that are being successfully implemented in the private sector.”

Associations signing on to the letter included the American College of Radiology, the American Society for Clinical Oncology, the Society of Nuclear Medicine and Molecular Imaging, and a number of state imaging and radiology societies.