Partisan Squabbles Threaten Legislation

AAFP Urges House, Senate to Act Together on SGR Repeal

March 12, 2014 12:22 pm News Staff

After the U.S. House and Senate received wide praise for introducing legislation that would repeal the controversial sustainable growth rate (SGR) formula for Medicare payment, passage of the bill now is in jeopardy because of partisan disagreements about how to finance the cost of repeal.

[Businessman kicking can on street]

Leaders in the House recently announced their intention to attach the SGR repeal legislation to another bill that would pay for the repeal by delaying implementation of the individual mandate in the Patient Protection and Affordable Care Act for as much as 10 years. The House plan would offer savings because fewer lower-income individuals and families will enroll in insurance plans, and, in turn, federal subsidies will not be required to pay for premiums. This proposal is likely to face strong opposition from Senate Democrats and President Obama.

"Failure to take advantage of this unique opportunity to repeal the SGR will contribute to the destabilization of the health care services offered to Medicare patients as Congress would once again scramble to temporarily avoid double-digit cuts in Medicare physician payment through yet another 'doc fix' and would kick the can further down the road," said AAFP President Reid Blackwelder, M.D., of Kingsport, Tenn., in a press statement.

Story highlights
  • A House plan to pay for a repeal of the Medicare sustainable growth rate formula (SGR) includes a provision that is unlikely to be accepted by Senate Democrats or President Obama.
  • The AAFP and other stakeholder organizations recently sent a letter to House and Senate leaders urging them to vote on legislation that would repeal the SGR.
  • Congress may enact another short-term fix before the current three-month patch ends on March 31 to avoid steep cuts to Medicare payments.

A three-month patch to the SGR went into effect in January, but it is set to expire on March 31. If the current legislation is not passed and no other action is taken, physicians will face a 24 percent cut in Medicare payments.

"Efforts to tie the SGR repeal legislation to partisan 'pay-fors' would consign this bill to failure in one or both chambers of Congress," Blackwelder said. "We remain optimistic that Congress can accomplish the bipartisan legislative goal of repealing the SGR, and we urge congressional leaders not to squander this opportunity to achieve a major bipartisan accomplishment."

The AAFP and other leading medical organizations signed on(3 page PDF) to a recent letter that urges leaders in the House and Senate to pass legislation repealing the SGR this month before the March 31 deadline. A total of 38 stakeholder groups signed the letter.

"Since its creation, the SGR formula's poorly conceived approach to containing Medicare costs has repeatedly threatened to disrupt access to care for seniors and disabled Americans," the letter reads. "At the same time, underlying volume-driven payment incentives have continued to inflate Medicare premiums, increase the burden on taxpayers, and contribute to health care cost growth systemwide."

The SGR Repeal and Medicare Provider Payment Modernization Act was introduced in early February with bipartisan support. The cost to replace the SGR formula has been estimated at $138 billion, and Congress has yet to identify ways to offset the cost that would be acceptable to both the House and the Senate.

"We recognize that enactment of these important reforms will require resolving two crucial outstanding issues: crafting long-term solutions to health care extenders and offsetting the budgetary cost of the legislation without merely shifting costs to beneficiaries, providers or the private sector," the letter reads.

The AAFP has urged Congress to repeal the SGR formula for more than a decade to prevent ever-increasing cuts to physician payments. During the past 12 years, Congress has enacted 16 patches to the SGR, which cost $154 billion. The so-called doc fixes failed to stabilize the Medicare payment process and continue to harm the long-term health prospects of elderly and disabled Americans, according to the AAFP.

The proposed legislation repealing the SGR calls for a 0.5 percent annual increase in Medicare payments for physicians until 2018 as they transition away from a fee-for-service model to a model based more on quality.

House leaders are planning a floor vote to pass a temporary SGR patch, perhaps for nine months, during the last week of March after Congress returns from a week-long recess scheduled for March 17.

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