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SGR Deal Would Fix Perennial Physician Pay Problem

Christopher Cheney, for HealthLeaders Media, February 7, 2014

Seeking to avert a cut in Medicare's physician payment rate set for April 1, lawmakers in the House and Senate have embraced a pact that would replace the sustainable growth rate formula with a payment system that includes a small rate increase for doctors.


Max Baucas

Sen. Max Baucus, (D-MT)

After a decade of squabbling and annual renewals, the federal Medicare guidelines for physician reimbursement known as the Sustainable Growth Rate appear destined for repeal and replacement.

A bipartisan deal announced Thursday in both houses of Congress includes an annual 0.5 percent reimbursement rate increase for doctors over five years, but the pact does not spell out a mechanism to pay for the new reimbursement system. In a joint statement from the Senate Finance Committee, House Ways and Means Committee, and House Energy and Commerce Committee, lawmakers urged passage of the SGR repeal deal.

"Congress has spent a decade lurching from one 'doc fix' to the next, creating a new, unnecessary threat to seniors' care each time. Enough is enough," said Sen. Max Baucus, (D-MT), chairman of the Senate Finance Committee. "This proposal would bring that cycle to an end and fix the broken system. Our bill makes Medicare's physician payments more modern and efficient, and it will protect seniors' access to their doctors. This bill is the product of years of hard work, and I hope Congress comes together to pass it."

Sen. Orrin Hatch, (R-UT), ranking member of the Senate panel, said replacing SGR is a necessary step in the push to replace the fee-for-service model in U.S. health care to a value-based system.

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