With Payment ''Bridge'' in Place, Congress Debates Repeal of SGR

Federal Update

Capitol building

Reform legislation that attempts to repeal the flawed Medicare physician payment formula known as the sustainable growth rate, or SGR, is currently making its way through Congress.

Late last year, Congress approved a budget agreement that would pay doctors at current Medicare rates for three months, plus a 0.5 percent increase. This “bridge” measure was intended to avoid the disruptions that would be caused if the 24 percent cut in the payment formula scheduled to take effect on January 1 was implemented.

The possibility of permanently repealing the SGR and replacing it with a program that rewards physicians for meeting quality benchmarks is more of a possibility than it’s been in a decade.

That being said, the obstacles before us for final passage are formidable.

Two bills have passed the relevant committees in the U.S. House of Representatives — the House Ways and Means Committee and the House Energy and Commerce Committee.

Both bills are generally similar in terms of structure. Both would give physicians in a fee-for-service program a .5 percent update for several years. After that time, positive updates would depend on how physicians measure up against selected quality and efficiency measurements. Physicians in alternative payment models in both bills would be paid according to the models’ contracts and received higher updates.

The Senate Finance Committee bill does not include the 0.5 percent update but does propose a similar overall framework. Notably, the Senate Finance Committee bill and House Ways and Means bills incorporate a number of the concerns voiced by the MMS, AMA, and other organizations, including an expanded definition and provisions for small practices.

The two House bills will need to be reconciled into one package before they go to the House floor for a final vote. In addition, there are a number of other provisions, often referred to as the health care extenders, which were not included in the House bills that some members want to see added before the final vote. Once the House and Senate bills are passed, differences will need to be resolved in a conference committee.

But the biggest challenge before Congress and physicians is how Congress plans to pay for the new SGR reform legislation. Funds from hospitals have been used in the past for payment for the short-term patches, much to the hospital industry’s dismay. And, although the cost of the repeal this year is less than ever before, the hospitals, nursing homes, and home health care community have launched an active campaign to oppose any of the funds coming from their sectors.

The MMS will cover major developments in the SGR debate on Washington, D.C., on its website at www.massmed.org/medicare.

—Alex Calcagno
MMS Director of Federal Relations

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