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SGR patched through for another year as Senate decides not to try for a permanent fix



March 31, 2014
Area(s) of Interest: Access to Care Advocacy 

Today, the U.S. Senate passed a year-long patch to stop the 24 percent Medicare sustainable growth rate (SGR) cut that was to go into effect on April 1. The bill, which already passed the U.S. House of Representatives last week, provides a 0.5 percent physician payment update through December 31, 2014, and then a 0 percent update until April 1, 2015. The bill now goes to President Obama for his signature.


Congress was again unable to come to an agreement on how to fund a permanent repeal of the badly broken formula, despite a bill with bipartisan, bicameral support. Congress appears poised to kick the can down the road for the 17th time in just 10 years. The California Medical Association (CMA) is extremely disappointed that Congress has been unable to find bipartisan funding sources and seize the unprecedented momentum of support for permanent Medicare payment reform.


On a bright note, the patch bill does include the California Medicare locality update, known as the California geographic practice cost index (GPCI) fix. The long overdue GPCI fix will update California’s Medicare physician payment regions and raise payment levels for urban counties misclassified as rural, while holding remaining rural counties harmless from cuts. The bill also delays for one year the ICD-10 medical billing coding conversion, pushing the implementation date to October 15, 2015.


Over 90 national, state and specialty physician organizations called for a no vote on this legislation in both the House and the Senate. The one-year patch is expected to cost roughly $20 billion. A significant chunk of that money will be generated through a budget gimmick, extending Medicare sequester cuts beyond the 10-year window used for budget scoring purposes. It is also funded with other physician cuts from misvalued codes and imaging criteria. Some funding came from hospitals and nursing homes.


CMA has worked hard this past year with the American Medical Association to develop legislation to repeal the Medicare SGR and importantly, establish a new Medicare payment system. The bill was adopted by all three House and Senate Committees on a bicameral, bipartisan, unanimous vote. However, without bipartisan agreement between the House and Senate leadership on how to pay for the repeal, there could not be a permanent fix of the flawed SGR.


“This past year, CMA led the movement for SGR reform at the AMA House of Delegates and worked aggressively with Congress to pass Medicare SGR reform legislation,” said CMA President Richard E. Thorp, M.D. “We will continue to fight for a permanent reform that stabilizes Medicare for physicians and improves access for patients to the doctor of their choice.”


It is unfortunate that Congress resorted to partisan funding sources that destroyed the bipartisan effort that had characterized the process earlier in the year. Congress largely ran out of time to engage in the final tough negotiation over the financing.


CMA and organized medicine will be working in the next few months on a revised political strategy to develop viable funding sources and achieve a permanent solution before next year.


Contact: Elizabeth McNeil, (800) 786-4262 or emcneil@cmadocs.org.

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