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SGR payment reform bill moves to full Congress



February 07, 2014
Area(s) of Interest: Advocacy Payor Issues and Reimbursement 

On February 7, the three congressional committees announced a final joint bipartisan, bicameral agreement on the Medicare sustainable growth rate (SGR) repeal and payment reform legislation, H.R. 4015. The agreement of the House Energy Commerce Committee, the House Ways and Means Committee and the Senate Finance Committee reflects the overwhelming support in Congress for eliminating the flawed SGR payment formula and establishing a new more stable Medicare payment system that will protect access to doctors for California’s seniors.


The California Medical Association (CMA) applauds the House and Senate negotiators for their perseverance in moving this legislation forward. The committees were receptive to CMA’s issues, giving small practices more time and funding assistance to transition to the new payment models and ensuring that physicians are involved in the development of the quality measures, clinical projects and alternative payment models. And CMA is most grateful that the committees included the California-specific language that will update our state's outdated Medicare payment localities, while holding the rural localities harmless from cuts.


The bill provides a 0.5 percent automatic payment update every year for five years during the transition to new payment models. The new system will allow physicians to select from two payment tracks—a fee-for-service track and an alternative payment model track.. The fee-for-service track with the existing quality, meaningful use and value modifier performance programs will provide physicians with potential bonuses of up to 9 percent. The alternative payment model track will pay 5 percent annual bonuses and require physicians to accept some financial risk, except for patient centered medical homes.


Most important, the bill eliminates the flawed Medicare SGR once and for all. While the bill is far from perfect, it is a reasonable agreement that was developed in an extremely difficult fiscal and political environment. CMA, the American Medical Association and organized medicine have fought for a workable framework on which we can continue to improve and build-upon in future years.


However, the bill is not over the finish line. Congress must now marry the policy to the funding sources. It is estimated that Congress will need to find up to $150 billion to fund the bill. There is much work ahead to meet the March 31 deadline. CMA will continue to be involved in every aspect of the bill to ensure its final passage.


We must keep the momentum going to get this bill to the President’s desk.


For more information, see the U.S. Energy and Commerce Committee fact sheet on the SGR legislation.


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

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