Lawmakers Propose Bill To Permanently Repeal Medicare SGR Formula

On Wednesday, Reps. Joe Heck (R-Nev.) and Allyson Schwartz (D-Pa.) unveiled legislation (HR 574) that would permanently repeal the sustainable growth rate formula, which sets Medicare physician reimbursement rates, The Hill's "Healthwatch" reports. 

Congress routinely has passed legislation to delay cuts called for by the SGR, but physicians face substantial reductions in their Medicare reimbursements each time the "doc fix" expires (Baker, "Healthwatch," The Hill, 2/6).
The most recent doc fix delayed the cuts until Jan. 1, 2014, at which time physicians face a 25% reduction to the Medicare reimbursement rates. 

About the Bill

HR 574 would maintain current physician reimbursement levels through next year. It then would instruct CMS to develop and test new payment models for the following five years. From 2015 to 2018, reimbursement rates would increase by 2.5% annually for primary care physicians and 0.5% for all other doctors (Ethridge, CQ Roll Call, 2/6).

Physicians then would be called to adopt a replacement model approved by CMS (Daly, Modern Healthcare, 2/6). According to "Healthwatch," the legislation aims to replace the SGR with a system that rewards physicians for quality care, instead of the current fee-for-service system ("Healthwatch," The Hill, 2/6).

Seventeen physician groups support the bill, including the American Academy of Family Physicians, according to Schwartz. However, the bill has not received support from the Republican Doctors Caucus (Modern Healthcare, 2/6).

It is unclear how the bill's costs would be offset, according to CQ Roll Call (CQ Roll Call, 2/6).

Schwartz previously introduced similar legislation, but the high cost of repealing the SGR blocked the bill's passage ("Healthwatch," The Hill, 2/6).

Republican Bill Expected

Meanwhile, House Ways and Means Health Subcommittee Chair Kevin Brady (R-Texas) is expected to release a separate bill that would replace the SGR with temporary payment increases while the government worked with physicians to develop a long-term alternative, Modern Healthcare reports.

The bill would use a modified fee-for-service model that offers extra payments to doctors who improve efficiency. It is expected to require the approval of physician groups for Medicare quality and reporting activities used to determine pay increases (Modern Healthcare, 2/6).

Brady said the bill's costs would be offset by structural changes to Medicare (CQ Roll Call, 2/6).

Recent CBO Estimates Make SGR Repeal More Likely

The chances of Congress passing legislation to repeal the SGR increased this week, after the Congressional Budget Office released a report that lowered the estimated cost of repealing the SGR from about $245 billion over 10 years to $138 billion, National Journal reports (Sanger-Katz, National Journal, 2/6).

According to Politico, the lower figure "significantly lightened the load" for lawmakers, who for years have agreed that they need to eliminate the SGR but have disagreed over how to offset the cost of doing so. 

Heck said, "I think the new CBO number bodes well for passing the legislation -- it's a much smaller hill to overcome" (Winfield Cunningham, Politico, 2/7).