Committees propose SGR repeal plan

The House Energy and Commerce Committee and the House Ways and Means Committee last week provided an update on their efforts to repeal the Sustainable Growth Rate (SGR) formula payment system, HIMSS reported. Ranking members of the committees said they have established a foundation for SGR repeal and physician payment reform.

On Feb. 7, House Energy and Commerce Committee Chairman Fred Upton (R-MI), Ways and Means Committee Chairman Dave Camp (R-MI), Energy and Commerce Health Subcommittee Chairman Joe Pitts (R-PA), Ways and Means Health Subcommittee Chairman Kevin Brady (R-TX), and Health Subcommittee Vice Chairman Michael C. Burgess, M.D. (R-TX) issued their Overview of SGR Repeal and Reform Proposal, which would unfurl in the following three phases:

Phase 1 -- Repeal the SGR and provide a period of predictable, statutorily defined physician payment rates.
Phase 2 -- Reform Medicare’s fee for service (FFS) physician payment system to reward physicians who provide high quality care.
Phase 3 -- Build upon the improvements made in Phase 2 by also rewarding physicians who deliver efficient care.

The committee leaders asked for stakeholder feedback on the outline by February 25. You can submit comments via email to .

Upton and Pitts stated in a press release: “For far too long, the only thing certain about the Medicare physician payment system has been uncertainty about the future. As a result, the complexity of the problem and financial burden on taxpayers has snowballed. With valuable input from doctors, stakeholders, and our colleagues in the GOP Doctors Caucus who have a firsthand understanding of the issue, we have developed a thoughtful framework to repeal SGR and reform the current system. And we are dedicated to ensuring these reforms will not add a dime to the deficit. Members on both sides of the aisle recognize the need to act, and we look forward to bipartisan collaboration on long-term solutions.”

Camp added, “For too long, doctors and the Medicare patients they serve have been trapped in an outdated and inefficient one-size-fits-all payment system that penalizes doctors who deliver high-quality, efficient and effective care. It is time to bring Medicare into the 21st century. Achieving that goal will be an all-hands-on-deck effort, and we want all the stakeholders – doctors, patients and others – to be a part of that process. They’ve already begun sharing their ideas and experiences, and I hope they will reflect on this initial set of principles and continue that dialogue.”

The Congressional Budget Office (CBO) annual report, The Budget and Economic Outlook, Fiscal Years 2013-2023, February 2013, published Feb. 5, indicates that eliminating the Medicare physician payment formula could cost $138 billion -- much less than previously estimated.  Previous estimates from CBO were that a SGR resolution or “doc fix,” could cost $300 billion over 10 years. Critics of the SGR law saw this as an opportunity to resolve the Medicare doctor reimbursement situation permanently, rather than the one-year-at-a-time stopgap measures Congress has traditionally relied on to avoid a crisis in providers accepting Medicare reimbursement, HIMSS reported.

The SGR formula was passed by Congress over 10 years ago to set Medicare physician fee schedule payments when actual spending exceeds a target set by the SGR formula. HIMSS reported that if Congress had not placed another temporary fix on the problem, physician payments would have been cut by 27 percent starting Jan. 1, 2013, costing $14 billion in 2014.  CBO’s report indicated that the cost would be less than previously estimated because of lower spending for physicians’ services in recent years.