Medicare SGR Repeal Advances in the House

A subcommittee of the House Energy and Commerce Committee approved legislation on July 23 that would finally scrap the flawed physician payment formula for Medicare, known as the Sustainable Growth Rate (SGR).  

Under the legislation, the SGR payment formula would be retired at the end of 2013. Starting in 2014, reimbursements under fee-for-service Medicare would be increased 0.5% each year. After 2019, physicians in fee for service would get an additional 1% for meeting certain quality measures, which are yet to be determined.

This legislation does not change payment arrangements for physicians currently practicing in a Medicare ACO. Physicians could choose to participate in other alternative payment models, as long they’re approved by the federal government. The incentives favor physicians who are willing to take the necessary steps to participate in new approved models. 

The subcommittee’s bill is the first step of what will probably be a very long road to reforming the Medicare payment system. Lawmakers have not yet identified how to pay for the bill. A vote by the full committee is expected before Congress’ August recess, which is scheduled to begin Aug 1.

The MMS will work with the state congressional delegation and the AMA to ensure that the payment updates are appropriate, and that the issues specific to small practices are adequately addressed.

The AMA said it was pleased with the progress made to ending the SGR. But it noted, “The details matter considerably, and there is still work to be done to ensure a strong future for Medicare.”  

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