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CMA applauds bipartisan movement in Medicare SGR overhaul legislation and California Medicare locality reform



August 02, 2013
Area(s) of Interest: Access to Care Advocacy Hospitals and Health Facilities 

Sacramento – H.R. 2810, the Medicare Sustainable Growth Rate (SGR) legislation, was voted out of the House Energy and Commerce Committee earlier this week, and will now move to the House Ways and Means Committee. Included in the bill is a California Medical Association (CMA) sponsored California Medicare locality reform of the Geographic Pricing Cost Index (GPCI), known as the “California GPCI Fix.”


“This is a huge step in the right direction,” said Richard Thorp, M.D., CMA president-elect. “We still have a long way to go, but we’re cautiously optimistic that by the year’s end, the flawed SGR formula and the outdated California Medicare localities will be reformed.”


While Medicare updates the hospital geographic regions and payments annually, it has not updated the physician regions in over 16 years. Therefore, counties such as San Diego and Sacramento are still designated as rural and not accurately compensated based on their higher local costs to provide care. Fourteen California counties (San Benito, Santa Cruz, Marin, Santa Barbara, San Diego, Monterey, Sonoma, Placer, El Dorado, Yolo, Sacramento, San Luis Obispo, Riverside and San Bernardino) are underpaid by up to 13% each year according to Medicare’s own data.


California physicians and their Medicare patients in these regions forego $54 million in Medicare funding each year – not including the private sector contracts tied to Medicare rates.


“CMA has been advocating for updates to newly urbanized counties while minimizing the reductions to rural counties,” added Dr. Thorp. “We want to make sure that patients have access to care in California’s rural areas as well as the newly urbanized areas. The Energy and Commerce bill will permanently hold the rural physicians harmless from cuts.


“On behalf of the more than 37,000 members of CMA, we thank the California leaders in Congress who have stood with the physicians of California on both the SGR and Locality GPCI issues. It is encouraging to know that they recognize the importance of fixing these longstanding problems,” said Dr. Thorp.

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