Both houses of Congress working together in an unprecedented collaboration to repeal SGR

November 01, 2013
Area(s) of Interest: Advocacy Payor Issues and Reimbursement 

On Thursday, the Senate Finance Committee and the House Ways and Means Committee released an unprecedented bipartisan and bicameral “discussion draft” proposal that would fully repeal the flawed Medicare Sustainable Growth Rate (SGR) formula. The draft legislation would not provide automatic payment increases for 10 years. However, starting in 2016 physicians can choose to participate in new payment models (such as medical homes) and qualify for 5 percent annual bonuses.

In 2017 and beyond, physicians remaining in the fee-for-service program can participate in a new “value-based performance payment program,” which will combine all of the incentive payments and penalties from the existing meaningful use, Physician Quality Reporting System and value-based modifier programs.

The proposal also includes $10 million to help small practices in rural or underserved areas improve performance and facilitate participation in alternative payment models. It also provides additional payment for complex chronic care management and establishes appropriate use criteria for imaging services set forth by medical specialty societies.

The SGR formula has been threatening severe payment cuts to physician reimbursement for more than a decade. Over the years, moves to repeal the SGR have failed, due in large part to the large price tag of such a fix. Recent declines in spending on physician services have lowered the estimates on the price tag for a repeal of the SGR. In February, the Congressional Budget Office cut earlier projections in half when it said that it would cost $138 billion over 10 years. With the cost going down so dramatically, there's a concerted effort on both sides of the political aisle to get this problem fixed this year.

"We applaud the Senate and House for working together on a bipartisan basis to repeal the flawed Medicare SGR payment formula. This is an encouraging development and it could be a pivotal step to stabilizing Medicare," says Richard Thorp, M.D., president of the California Medical Association (CMA). "With the drastically lower price tag and bipartisan support for the necessary policy changes, we must seize the opportunity to set Medicare on a more stable and predictable course for current and future generations of patients and physicians."

Comments on the draft outline are due by Nov. 12, which is when the House will be back in session. CMA is currently analyzing the proposal, and looks forward to continuing the constructive, bipartisan dialogue with the committees as preparations are made for moving legislation forward. There is work to be done to refine and improve the current proposal so that it works for physicians and their patients.

"CMA will be working to improve the current proposal so that physicians can sustain their practices," says Dr. Thorp. "Hopefully, we can build payment and care delivery models that are as advanced and effective as our medical care."

CMA is also urging the committees to include the California geographic locality update in the legislation.

Tell Congress to repeal the SGR once and for all

CMA is urging Congress to keep the momentum going and enact final payment reform before the end of the year. Physicians are asked to call, write or email their members of Congress and urge them to continue working in a bipartisan manner to protect Medicare and seniors’ choice of physician by repealing the flawed Medicare SGR formula in 2013 and enacting a stable payment system.

To be connected with your members of Congress, call AMA’s Grassroots Hotline (888/434-6200) or visit www.FixMedicareNow.org.

Contact: Elizabeth McNeil, (415) 882-3376 or emcneil@cmadocs.org.


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