House Committee Passes SGR Repeal Bill Before August Recess

August 08, 2013 12:15 pm News Staff

The House Energy and Commerce Committee unanimously approved a Medicare physician payment bill on July 31 that would abolish the sustainable growth rate (SGR) formula and provide a 0.5 percent physician payment increase for the next five years.

But in passing the Medicare Patient Access and Quality Improvement Act of 2013( (H.R. 2810), the Energy and Commerce Committee did not propose a solution for paying for repeal of the SGR. As a result, the measure will not be sent to the full House for consideration until lawmakers find the necessary offsets to pay for the elimination of the flawed formula. The Congressional Budget Office says the cost of the SGR repeal in H.R. 2810 is about $200 billion, according to Kevin Burke, director of the AAFP's Division of Government Relations.

"Identifying what in the federal Medicare Part B budget should be cut by $200 billion is a daunting task," said Burke. "The first place Congress typically goes is other physician payments, like those for imaging services."

However, Congress already has made the easy cuts, said Burke. "It is possible that if the SGR repeal measure is included in a larger funding bill, like the continuing resolution or a tax reform bill, Congress could use savings from other non-Part B accounts to offset the SGR repeal bill. But then this bipartisan bill is likely to be overwhelmed by much greater political interests and forces. These are difficult and treacherous seas to navigate."

The SGR has called for steep reductions in the Medicare physician payment rate for the past several years, and, in most instances, Congress has acted at the last minute to prevent the cuts from taking effect. Without congressional intervention this year, the SGR will trigger a nearly 25 percent reduction in the physician payment rate on Jan. 1.

Members of the Senate Finance Committee, meanwhile, are likely to introduce their own bipartisan version of legislation to repeal the SGR after Congress returns from its summer recess in September. Similar to the House bill, the Senate proposal is likely to incorporate performance-based measurements in an attempt to move Medicare from a volume-based to a value-based health care system.