Congress Moving Toward Repeal of Medicare's SGR Formula?

February 6, 2014—The American Medical Association (AMA) announced that new joint legislation to repeal Medicare's Sustainable Growth Rate (SGR) formula is advancing to both chambers of Congress after an agreement announced by the three committees that put forth repeal bills earlier this session. The bill is titled SGR Repeal and Medicare Provider Payment Modernization Act of 2014.

According to the AMA Wire, the agreement of the US House of Representatives Energy and Commerce Committee, the House Ways and Means Committee, and the US Senate Finance Committee reflects the overwhelming bipartisan support for eliminating the SGR formula. The aim is to put Medicare on the path toward a stable, 21st-century program that can meet the growing health care needs of the nation’s seniors. Once it has completed an analysis of the bill, the AMA will provide additional information about what the joint legislation would mean for physicians.

The AMA noted that in addition to repealing the SGR formula, the bill includes automatic positive payment updates of 0.5% for 5 years, a consolidated and restructured Medicare quality reporting program, and transitions to alternative payment models.

Congress is now working against a March 31 deadline, at which point the SGR formula calls for a 24% cut to physician payments, advised the AMA.

In a statement issued by the AMA, the organization’s president, Ardis Dee Hoven, MD, commented, “The American Medical Association congratulates House and Senate negotiators for taking this critical step toward reforming the nation's Medicare program. Today’s introduction of SGR Repeal and Medicare Provider Payment Modernization Act of 2014 would not have been possible without their hard work and commitment. Now Congress is closer than it has ever been to enacting fiscally prudent legislation that would repeal Medicare's fatally flawed SGR formula.

“This legislation is the product of months of unprecedented bipartisan, bicameral work to reach this landmark agreement to build a stronger Medicare program. Throughout the legislative process, the bill authors have been receptive to AMA's recommendations to improve the policy.”

Dr. Hoven continued, “Congress has been debating the shortcoming of the SGR policy for more than a decade. Continuing the cycle of short-term patches by merely addressing the 2014 cut that is imminent on April 1 without solving the underlying problem would be fiscally irresponsible and further undermine the Medicare program. It is time for action to repeal the SGR and establish a transition to a new, more stable Medicare physician payment policy to better serve America's senior citizens.”

A one-page summary of the bill is available online with the respective February 6 press releases of the committees: the Energy and Commerce Committee, the House Ways and Means Committee, and the Senate Finance Committee.