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Congressional committee unveils draft legislation to eliminate SGR formula

June 06, 2013


A leading committee in the U.S. House of Representatives last week released draft language of a bill that would repeal the sustainable growth rate (SGR) formula and reform the Medicare payment system.


The House Energy and Commerce Committee, which has been working on a framework for abolishing the SGR formula since the beginning of the year, hopes to establish a revitalized Medicare system that rewards physicians for delivering high-quality, efficient care.


Key provisions outlined in the legislation include immediate repeal of the SGR formula, establishment of an as-yet undefined period of stable payment updates and maintenance of a fee-for-service payment option. The legislation also allows for physician groups to become leaders in developing quality measures in pay-for-performance systems as well as in creating alternative payment models that work for specific medical specialties, practice settings and patient populations.


The draft broadly reflects many of the principles for transitioning to a higher-performing Medicare system that the California Medical Association, the American Medical Association AMA and more than 100 state and specialty medical societies submitted to Congress last fall.


"Today we take the next step forward in solving a problem that has been kicked down the road too many times," Rep. Joe Pitts, R-Pa., chairman of the House Subcommittee on Health, said in a news release announcing the draft legislation. "I'm confident that an honest, open process can help us build a stronger, more reliable Medicare program for doctors and patients."


The committee held a special legislative hearing June 5, and has solicited additional feedback from the physician community to help flesh out the details of the current draft.

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