AANEM News Express

AANEM News Express

Congress Considers End to SGR Formula

By Catherine French, MAPL, Senior Analyst of Medical Economic Affairs

In Congress last week, a bill was introduced by Rep. Allyson Schwartz, D-PA, and Rep. Joe Heck, DO, R-NV, that seeks to end Medicare’s sustainable growth rate (SGR) formula. It also calls for high quality care and lowers health care costs. The bill attempts to transition away from a fee-for-service model. Additionally, leaders from the House Energy and Commerce Subcomittee have made SGR the focus of its first hearing in 2013. Along with the members of the House Ways and Means Committee, they will be soliciting comments on SGR and hope to draft another bill before the end of February.

It’s expected the two bills will differ on how to eliminate existing fee-for-service payment systems and how to develop new payment systems. Despite their differences, both bills would eliminate the annual threat of Medicare reimbursement cuts, and it comes at a time when repealing the SGR is calculated at a lower rate than it has been in many years. Schwartz and Heck’s bill appears to have support from a wide range of physician groups and organizations.

The flurry of congressional action comes on the heels of a new report issued by the Congressional Budget Office, which estimates the cost of repealing the SGR is $138 billion, down from last year’s estimate of $244 billion. The reduction is due to lower than expected growth in Medicare physician spending.  

“We are pleased to see movement away from the SGR formula and hope that any new methods will not only encourage quality care, but also ensure access to care,” said Shirlyn Adkins, AANEM executive director.

Repealing and replacing the SGR has been acknowledged as a priority during this session of Congress. AANEM staff is monitoring all proposed changes to the Medicare fee schedule and will provide more information on the bills once it becomes available.

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