Bill Offers to Eliminate SGR For Good

Two representatives are presenting a bill to do away with the flawed SGR formula, which dictates the annual cuts to Medicare reimbursement that Congress prevents on a yearly basis.

Could there actually be an end to the Sustainable Growth Rate formula? Two representatives are presenting a bill to do away with the flawed SGR, which dictates the annual cuts to Medicare reimbursement that Congress prevents on a yearly basis.

Rep. Allyson Schwartz (D-Pa.) and Rep. Joe Heck (R-Nev.) introduced the Medicare Physician Innovation Act of 2012 on Wednesday.

“The existing Medicare physician payment system is unsustainable and the SGR must be repealed immediately,” according to the framework for the bill. “Real progress toward a quality-based, fiscally sound payment system cannot begin without eliminating the uncertainty and instability resulting from the SGR that has persisted for a decade.”

The bill would eliminate the SGR by using money set aside for military operations in Iraq and Afghanistan. Those funds will not be needed any more and will never be spent.

By constantly postponing the Medicare cuts, Congress dug itself a $300 billion hole and on Jan. 1, 2013 the cut to reimbursements will be as steep as 30%.

“Over the past decade, the repeated threat of cuts to physician payments resulting from the SGR have brought chaos to the practice environment,” said David L. Bronson, MD, FACP, president of American College of Physicians, in a statement. “It is difficult for physicians to keep their doors open, especially for our members in practices that care for underserved populations, particularly in the nation's low income and rural communities, with the constant threat of Medicare payments being cut by a quarter or more.”

The legislation calls for Congress to stabilize the payment system by maintaining 2012 payment levels through the end of 2013. After that time there would be a five-year transition period to “positive and predictable updates.” From 2014 to 2017, the bill provides an annual increase of 2.5% for primary care, preventive and care coordination services provided by clinicians for whom 60% of their Medicare charges are for those services.

At the end of 2011 and beginning of 2012, leaders of health care organizations were calling for the SGR to be eliminated because if the cuts take place it would create severe problems for access to care for some people. Glen Stream, MD, MBI, president of the American Academy of Family Physicians called the SGR “unworkable.” And the ACP called for the rate’s repeal in its State of the Nation’s Health Care briefing in late January.

“For far too long we failed America’s seniors and created a long-term fiscal nightmare for Medicare by maintaining the status quo of the broken Medicare physician payment system,” Schwartz said in a statement. “Now is the time to fix the broken system once and for all by moving forward with a payment system that rewards quality and value, saves lives, and assures seniors’ access to the care they need.”

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Medicare Physician Payment Innovation Act of 2012 Framework