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MedPAC Releases SGR Repeal Proposal

Cheryl Clark, for HealthLeaders Media, September 20, 2011

Congress should repeal the controversial Sustainable Growth Rate, or SGR, that's poised to cut physician's pay 30% starting Jan. 1, the Medicare Payment Advisory Commission said in a draft proposal released Monday.

The independent Congressional agency, which advises the U.S. Congress on issues affecting Medicare estimates lost federal revenue, would total $300 billion.

To offset the loss, primary care physicians' pay would be frozen for 10 years while doctors providing more specialized services, from cardiology to endocrinology to rheumatology, would endure cuts of 5.9% in each of three years. Specialists' pay would then be frozen for the remainder of the 10 years.

This MedPAC option, released in written form late Monday with four recommendations, would save about $100 billion in additional federal payments to doctors, only one-third of what would be needed to completely offset what would be lost by repealing the SGR.

The remaining $200 billion would come from other reductions in payment for about 30 other healthcare services and professions, such as reducing payments to clinical labs by 10%, curtailing payments to durable medical equipment suppliers who don't competitively bid and recalculating the formula for skilled nursing facility payments, all of which could save $235 billion over 10 years.

The commission is open to receiving comments on the draft proposal before issuing its final recommendation to Congress, which would have to vote to repeal the SGR and set in motion the other policy changes.

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