CBO Says Senate Bill To Repeal SGR Would Cost $180B Over 10 Years

The Congressional Budget Office estimates that a bill (S 2110) by Senate Democrats that seeks to repeal and replace Medicare's sustainable growth rate formula, which sets Medicare physician reimbursement rates, would cost about $180 billion over 10 years, Modern Healthcare reports.

CBO's cost analysis of the bill -- which was introduced by Senate Finance Committee Chair Ron Wyden (D-Ore.) -- comes after the House last week approved its SGR repeal bill (HR 4015), which is expected to stall in the Senate because of an amendment that would delay enforcement of the Affordable Care Act's individual mandate through 2019. CBO estimated that the add-on would increase the nation's uninsured population by about 13 million in 2018 (Dickson, Modern Healthcare, 3/20).

Lawmakers have been attempting to address the SGR in advance of a 24% cut to physicians' Medicare reimbursements scheduled to take effect on April 1.

Senate Bill Details

In addition to repealing and replacing the SGR formula, Wyden's bill would:

• Freeze the base rate pay of any doctor who participates in Medicare through 2019;
• Shift the health care system from a fee-for-service model to one that reimburses providers based on the quality of care;
• Provide a 0.5% annual raise through 2018 to any doctor who participates in Medicare (Crane, Medscape Medical News, 3/20); and
• Provide funding -- known as Medicare extenders -- for expiring programs that are considered highly essential to rural hospitals, such as ambulance add-on payments, outpatient therapy caps and low-volume provider adjustments.

If the measure had been a "straight forward" SGR repeal bill, its cost would have been about $140 billion over a decade, according to Modern Healthcare. The extenders add about $41 billion to the 10-year price tag.

Although Wyden did not disclose a funding mechanism for the measure, individuals familiar with discussions over the bill have said that Wyden is open to the possibility of using so-call war funding, or contingency operations funds that are set aside for oversees combat missions (Modern Healthcare, 3/20).