Practice Economics

SGR replacement promises small pay boost over 5 years


Doctors could see a 0.5% pay increase for 5 years and a transition to alternative delivery and payment models under consensus legislation to repeal the Medicare Sustainable Growth Rate formula.

The legislation, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (H.R. 4015), is based on three separate proposals approved last year by the House Energy and Commerce Committee, the House Ways and Means Committee, and the Senate Finance Committee. It was introduced Feb. 6.

Senator Max Baucus

The bill does not address how to pay for the SGR replacement. One recent estimate by the Congressional Budget Office put that price tag at $120 billion to $150 billion.

Sen. Max Baucus (D-Mont.), chairman of the Finance committee, hailed the agreement. "This proposal would bring that cycle to an end and fix the broken system," he said in a statement. "Our bill makes Medicare’s physician payments more modern and efficient, and it will protect seniors’ access to their doctors."

American Medical Association President Ardis Dee Hoven commented that this consensus bill means that "Congress is closer than it has ever been to enacting fiscally-prudent legislation that would repeal Medicare’s fatally flawed sustainable growth rate formula."

Dr. Charles Cutler, chair of the American College of Physicians’ Board of Regents, said in a statement that the ACP was encouraged that the bill contained many of the elements it had backed, including:

• Replacing the SGR with a system focused on quality, value, and accountability.

• Consolidating the three existing quality programs into a streamlined and improved program that rewards physicians who meet performance thresholds and improve care for seniors.

• Implementing a process to improve payment accuracy.

• Creating incentives for physicians to move into advanced payment models.

Dr. Reid Blackwelder, president of the American Academy of Family Physicians said, "For more than a decade, the SGR has threatened our most vulnerable patients’ access to care by requiring drastic cuts in payment for medical services. By ending the annual, biannual, monthly, sometimes even bimonthly cycle of last-minute ‘fixes’ to prevent mandated SGR cuts, Congress will stabilize Medicare and bring peace of mind to their elderly and disabled constituents."

"Much work remains to create a system that can finally provide certainty to seniors and their doctors," Rep. Fred Upton (R-Mich.), chairman of the Energy and Commerce committee, said in a statement. "I look forward to building upon this progress and continuing the momentum until this is across the finish line."

The most recent cuts called for by the SGR were deferred as part of federal budget legislation enacted at the end of 2013. A short-term 0.5% increase in Medicare physician fees is slated to expire March 31.

On Twitter @aliciaault

Next Article: