CBO: House Ways & Means’ SGR Fix Would Cost $121B Over 10 Years
On Friday, the Congressional Budget Office estimated that the House Ways and Means Committee's bill (HR 2810) to repeal and replace Medicare's sustainable growth rate formula would cost $121.1 billion over 10 years, MedPage Today reports (Pittman, MedPage Today, 1/24).
According to CBO, the estimate makes the House Ways and Means proposal the least costly of three proposed bills to reform Medicare's SGR. CBO estimated that a bill approved by the House Energy and Commerce Committee would cost $153.2 billion over that same time period, while a bill proposed by the Senate Finance Committee would cost $148.6 billion (Ethridge, CQ Roll Call, 1/24).
The three committees are working to hammer out the differences in their respective bills and produce a permanent repeal measure before a short-term fix on the SGR expires on March 31 (Zigmond, Modern Healthcare, 1/24). If lawmakers cannot come to an agreement, physicians face a 24% cut to Medicare reimbursement rates (MedPage Today, 1/24).
Bill Costs, Savings
CBO said the House Ways and Means version was less costly than the Energy and Commerce proposal because the Ways and Means bill includes lower annual updates to physicians' payment rates and lower overall costs associated with its Alternative Payment Model Program.
According to CBO, nearly all the costs associated with the Ways and Means bill come from its payment increases to physicians. The measure would increase Medicare reimbursement rates by 0.5% in 2015 and 2016, and then reimbursement rates would remain stable through 2023. CBO said those updates would increase spending by $118.4 billion between 2014 and 2023.
In addition, CBO said that establishing a value-based performance incentive program and an APM program -- included in the House Ways and Means version in order to ensure physicians receive better payment adjustments -- would increase spending by $5.5 billion through 2023.
However, CBO also estimated that the bill would save $2.8 billion over 10 years through its requirement that Medicare payment codes be developed to encourage care coordination and medical-home use (CQ Roll Call, 1/24).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.