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CBO Analysis Renews Calls for SGR Repeal

John Commins, for HealthLeaders Media, February 7, 2013

A Congressional Budget Office analysis released this week lops $107 billion from the cost of eliminating the Sustainable Growth Rate funding formula, and that new estimate has resuscitated efforts by some in Congress and the physicians' lobby to repeal the reviled but unenforced mandate.

The new projection, found on page 31 of the CBO's 77-page Budget and Economic Outlook: Fiscal Years 2013 to 2023, explains that repealing the SGR would cost $138 billion over the next 10 years—significantly less than the $248 billion priced in previous estimates. CBO attributed the lower cost to a decline in the rate of Medicare spending growth when compared with historic trends, and lowered estimates for spending for physician services.

Although the SGR has been around since 1997, the reimbursement cuts under the formula have never taken effect thanks, to the repeated interventions of Congress at the behest of physicians.

Most recently, SGR cuts of nearly 30% were scheduled to take effect on Jan. 1 to account for years of "kick the can" delays of smaller, incremental annual cuts. However, as it has done every year since the SGR went into effect, Congress on Jan. 1, 2013 stepped in to delay the cuts until Jan. 1, 2014.

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