SGR Permanent Fix Bill Filed in Congress

The sweeping package introduced in the US House and Senate Thursday repeals the Sustainable Growth Rate funding formula and adds an automatic 0.5% payment update each year for five years. Proponents say it will stabilize Medicare payments to physicians.

Congress on Thursday unveiled its latest attempt to provide a permanent fix to the widely reviled Sustainable Growth Rate funding formula that, if approved, would avert a 21% cut in Medicare reimbursements for physicians at the end of the month.

The sweeping package repeals the SGR and adds an automatic 0.5% payment update each year for five years. Proponents say it will stabilize Medicare payments to physicians. The bill also extends the Children's Health Insurance Program another two years.

It's not exactly clear how Congress would pay for the bill, which is estimated to cost between $175 billion and $200 billion. There has been speculation that some of the cost would be made up with means-tested Medicare premium increases on seniors and accounting maneuvers, and that some of the cost would be accrued to the federal deficit.

The House and Senate versions of the bill are nearly identical to failed legislation last year, but now there is reportedly bipartisan support in both chambers, according to a statement from the office of House Ways & Means Committee Chairman Paul Ryan, (R-WI).

In addition to repealing the SGR, the bill would:

• Restructure and streamline physician-led quality improvements that allow medical specialty societies to determine the most appropriate quality improvement metrics and strategies for use in quality initiatives.
• Adopt flexible criteria that allow physician participation and engagement in delivery and payment models that are meaningful to their practices and patient populations, including preserving a fee-for-service option and recognizing the value of clinical data registries for improving quality.
• Improve the fee-for-service system by streamlining Medicare's existing web of quality programs into one value-based performance program. It increases payment accuracy and encourages physicians to adopt proven practices.
• Incentivize the use of alternative payment models to encourage doctors and providers to focus more on coordination and prevention to improve quality and reduce costs.

The SGR has been in place since 1997 and the permanent repeal has been an annual sideshow in Congress that has resulted in 17 temporary fixes over the years. Repealing the SGR has been a top legislative priority of the American Medical Association, and other physicians' associations. Not surprisingly, physicians groups hailed Thursday's repeal bill and pledged their full support.

"We applaud the reintroduction of legislation that will provide health security to millions of elderly and disabled Americans by establishing a stable system by which to pay physicians for their care," said AAFP President Robert Wergin, MD, president of the American Academy of Family Physicians.

"By passing this bill, lawmakers will stabilize Medicare, address the dual challenges of improved care and lower cost, and bring peace of mind to their elderly and disabled constituents."

The American Association of Neurological Surgeons and Congress of Neurological Surgeons praised the bill. AANS/CNS Chairman John A. Wilson, MD, said he was "encouraged that the bill establishes a stable mechanism for reimbursing doctors and will help create a delivery system that promotes high-quality, high-value, and better coordinated care for our patients."