Obama Signs SGR Repeal

President Obama on Thursday signed bipartisan legislation repealing the Sustainable Growth Rate (SGR) formula that has been used to calculate Medicare payments since 1997.

The Medicare Sustainable Growth Rate formula is now a thing of the past.

President Barack Obama signed the “Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)” Thursday afternoon. The bill repeals the controversial funding formula, which became law in 1997. Since its enactment, the formula has repeatedly required short-term fixes (17 in total) in order to avoid pay cuts to doctors who treat Medicare patients.

The move means physicians no longer face a 21% cut this month in payments for treating Medicare patients. Instead, they’ll be paid using a new funding regime, one designed to focus more on quality of care than on fees for services. The bill also includes a 2-year extension of the Children’s Health Insurance Program.

In signing the bill, Obama praised the legislation as a rare sign of bipartisanship, according to the Associated Press.

Health care organizations and physicians groups have been pushing for the repeal for years. And though the bill ultimately garnered bipartisan support in both houses of Congress, it had been the subject of some uncertainty due to concerns that it would add to the federal deficit. The Congressional Budget Office says the bill will increase the debt by $141 billion over 10 years.

Instead of facing a pay cut, doctors will now receive a half-percent increase in pay in each of the next 5 years. Part of that increase will be offset by a premium increase, beginning in 2018, for Medicare recipients earning more than $135,000 per year.

In a statement earlier this week, Robert Wergin, MD, president of the American Academy of Family Physicians, said the repeal was essential to ensure continued care for Medicare patients. He said Medicare beneficiaries make up about 25% of a typical family physician’s practice. In some cases, he said, elderly and disabled patients constitute 6 in 10 of a practice’s patients.

“These individuals depend on their family physicians for preventing illness, treating problems if they do arise, coordinating with other health care team members, and ensuring the right treatment from the right professional at the right time,” he said. “By passing MACRA, Congress has ensured uninterrupted health access security to their elderly and disabled constituents.”