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Passage of Medicare SGR reform could be a reality: Call your Members of Congress today



March 20, 2015
Area(s) of Interest: Advocacy Payor Issues and Reimbursement 

Congress is on a fast track to beat an April 1 deadline to pass a bipartisan plan to repeal and replace the flawed Medicare sustainable growth rate (SGR) with bills HR 2 and S 810. U.S. House Speaker John Boehner (R-OH) and Minority Leader Nancy Pelosi (D-CA) have negotiated a bipartisan agreement to fund the Medicare SGR payment reform legislation. They intend to hold a vote on the House floor as early as Tuesday, March 24. House Majority Leader Kevin McCarthy (R-CA) said that “Congress has never been closer.”


Last year, identical legislation was unanimously approved by the three House and Senate committees with the support of more than 750 state and national physician organizations, but failed to pass Congress because leadership in both houses could not agree on funding sources for the law. Physicians wound up with the 17th short-term SGR patch in a decade. This year, however, after years of kicking the can down the road, both Boehner and Pelosi have agreed that the $130 billion phony cost to repeal the SGR does not now need to be fully “paid for.”


In addition to eliminating the flawed SGR payment formula, this year’s bill includes the choice of two payment tracks for physicians. Track 1 is a fee-for-service program that consolidates the quality reporting programs, reinstates large bonuses (up to 12 percent) and reduces the penalties for quality programs. Track 2 is the Alternative Payment Model Track, which would provide 5 percent bonus payments and includes new care models like medical homes. The new payment models and quality measures are slated to be developed by physicians. The bill also includes $125 million in funding assistance to help small practices transition. Until these payment tracks are in place, physicians will receive a 0.5 percent update annually for three years.


The bill also includes new Medicare spending (approximately $70 billion) for physician payment increases, bonuses and extenders that will be offset with corresponding funding. The funding sources include payment cuts to hospitals and others for post-acute care, as well as premium increases for very high-income seniors for Medicare Part B and Medicare Part D (pharmacy benefits), as well as a deductible for new Medigap policies.


And, finally, the bill extends the expiring Children’s Health Insurance Program (CHIP), which covers more than one million uninsured California children, for two more years.


Some conservative groups are asking for a “no” vote because they claim the bill will increase the deficit. However, the Wall Street Journal, Americans for Tax Reform and many other conservatives are joining Speaker Boehner to urge its passage. They argue that it is fiscally responsible to repeal the SGR and enact the structural beneficiary reforms that will put Medicare on a path to solvency. The American Association of Retired Persons (AARP) has expressed concerns with the increased premiums although they will impact very few high-income seniors. Despite these concerns, Leader Pelosi is urging her Democratic caucus to support the bill because it finally stabilizes physician payments and extends CHIP.


Your support at this final hour is key. With bipartisan support from Congressional leadership for both the policy and the funding, we have never been this close. However, thousands of physicians and patients must call and email their federal Representatives and Senators as soon as possible to overcome the opposition and ensure the bill’s final passage.


Call your Representatives now! Put the SGR over the finish line!


To make a call from the American Medical Association (AMA) Grassroots Hotline, dial (800) 833-6354 and enter your ZIP code to be automatically connected to your representative. Give your name, specialty and practice location, and don’t forget to call back to connect to our California Senators.


Urge your Representative and Senators to:


Vote YES on the Medicare SGR and CHIP legislation, because bills HR 2 and S 810 are:


  • Fiscally responsible.

  • Will stabilize my practice and protect access to care for my patients – seniors, the disabled, military families and uninsured children in our community.

  • Email your Member of Congress


    You may email your Member of Congress and the California Senators via the AMA’s Fix Medicare Now grassroots website: www.fixmedicarenow.org; click on “physician”; then click on “write Congress.”


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

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