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House Bill Seeks to Repeal SGR Formula for Medicare Reimbursement

Legislators want better pay for docs (Feb. 6)

U.S. Reps. Allyson Schwartz (D-PA) and Joe Heck, DO (R-NV) have introduced a bill to end the widely disliked sustainable growth rate (SGR) formula for physician reimbursement under Medicare and replace it with yearly payment increases.

“For over a decade, the sustainable growth rate (SGR) formula — which is used to determine payments for physicians’ services under Medicare — has threatened to impose steep cuts in Medicare payments for care provided to America’s seniors,” the legislators said in a Feb. 6 announcement. “These cuts threaten to drive physicians out of Medicare, creating severe access problems for our seniors and leading to uncertainty and instability for patients, health care providers, and the federal budget.”

The proposed Medicare Physician Payment Innovation Act seeks to:

  • Permanently repeal the SGR formula
  • Provide annual positive payment updates for all physicians for 4 years
  • Ensure access to preventive care, care coordination, and primary care services through increased payment updates for those services
  • Test and evaluate new payment and delivery models
  • Identify unique payment models to provide options for providers across medical specialties, practice types, and geographic regions
  • Stabilize payment rates for providers who demonstrate a commitment to quality and efficiency within a fee-for-service model
  • Ensure long-term stability in the Medicare physician payment system through predictable updates that accurately reflect the cost and value of providing health care services in coordinated care models

“Over the past decade, the repeated threat of cuts to physician payments resulting from the SGR has brought chaos to the practice environment. It is difficult for physicians to keep their doors open, especially for our members in small or solo practices, with the constant threat of Medicare payments being cut by 25 percent or more,” said Charles Cutler, MD, FACP, Chair-elect, Board of Regents, American College of Physicians. “We enthusiastically support this legislation. It not only addresses the continued threat of the SGR formula, it also moves Medicare beyond a pure fee-for-service payment model toward new models that better align payment with value.”

The Congressional Budget Office estimates that it will cost $138 billion to permanently repeal the SGR.

Source: Rep. Allyson Y. Schwartz; February 6, 2013.

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