AAFP Declares Victory for FPs as Senate Fully Repeals SGR

Lawmakers Credit Physicians' Tireless Advocacy

April 14, 2015 09:30 pm News Staff

Family physicians triumphed Tuesday night as the Senate removed a longstanding obstacle to improved patient care by repealing the Medicare sustainable growth rate (SGR), the controversial formula that had threatened to cut physician payments for years.

[Victory stamped over the term SGR]

The Medicare Access and CHIP (Children's Health Insurance Program) Reauthorization Act, or MACRA, is the culmination of years of sustained lobbying and outreach by the AAFP and its members. The legislation, which the House passed last month with an overwhelming vote of 392-37, repeals the SGR formula used to calculate Medicare payment rates to physicians and preserves seniors' and children's access to care. The bill also establishes an alternative set of annual payment updates and funds CHIP and other programs important to family medicine for two years.

President Obama has said he will sign the bill into law, according to media reports.

Story Highlights
  • The Senate fully repealed the Medicare sustainable growth rate, which had threatened to cut physician payments for years, and the president has said he will sign the legislation into law.
  • Legislators said the bill passed in large part thanks to pressure from the physician community.
  • The legislation establishes a set of annual physician payment updates and funds for two years the Children's Health Insurance Program, the National Health Service Corps, the Teaching Health Center Graduate Medical Education program and the federal community health centers programs.

"For more than a decade, elderly and disabled Americans didn't know whether they would continue to receive the medical care they needed," AAFP President Robert Wergin, M.D., of Milford, Neb., said in a statement. "They couldn't count on whether they could see the physician they'd had for years. But with today's passage of the Medicare Access and CHIP Reauthorization Act, these patients can put those worries behind them."

Acknowledging the strong work of primary care physicians who regularly visited Capitol Hill and called and emailed legislators, Wergin said the grassroots support was a major reason the bill passed.

"The AAFP has worked tirelessly on this issue, and with your help, the House and the Senate finally repealed the flawed SGR formula," Wergin wrote in an email to members. "This may have taken more than a decade, but all of our efforts on Capitol Hill have resulted in a resounding triumph for our specialty."

In the coming years, CMS will replace the SGR formula with a new Merit-based Incentive Payment System that consolidates and expands existing Medicare fee-for-service incentive programs. A second track includes incentives for physicians to adopt alternative payment models that depart from traditional fee-for-service.

The current payment rate in the Medicare physician fee schedule will rise 0.5 percent on July 1, 2015, and another 0.5 percent each year through 2019. Under the new legislation, the updated payment will not change from 2020 through 2025. However, physicians in alternative payment models, such as patient-centered medical homes, would earn a 5 percent update in payment rates each year.

SGR Repeal: It's Been a Long Time Coming ...

To get a sense of the magnitude of time and resources the AAFP, its members and others have put into the herculean task of prevailing upon Congress to do the right thing and permanently repeal the sustainable growth rate formula used to set Medicare physician payment rates, follow this link.

The AAFP pushed for several components of MACRA that support primary care and increased access for target populations in need. The bill expands access to care for children and vulnerable populations with two years of extended funding for CHIP, the National Health Service Corps, the Teaching Health Center Graduate Medical Education (GME) program and the federal community health center program

"The legislation continues training in community-based settings rather than in specialty-focused academic hospitals," Wergin said in the statement. "This is a crucial step toward reforming the federal GME program to include training in the settings in which family physicians practice and individuals receive most of their health care."

The legislation continues a series of reforms that will transform and improve patient care while allowing primary care physicians to devote their attention to their patients.

"The passing of this bill ignites an important pivot of the nation's health delivery system to one built on strong primary care," Wergin told members in the email. "One that pays for its quality rather than just the volume of services it provides."

Momentum built over the past two years as the AAFP and other physician organizations campaigned aggressively for full repeal of the SGR. Several lawmakers, including Rep. Michael Burgess, R-Texas; Sen. Ron Wyden, D-Ore.; and Sen. Orrin Hatch, R-Utah -- all sponsors of the current bill or earlier versions of it -- said Congress acted in response to continued pressure from the medical community about the need to repeal the SGR.

Physicians have dealt with years of short-term patches, known as "doc fixes," that Congress passed in lieu of full repeal. During the past 12 years, 17 temporary patches to avoid payment cuts called for by the SGR formula have cost a total of $169.5 billion. Scheduled cuts in physician payments under the SGR, part of the Balanced Budget Act of 1997, were always a threat despite never actually having been implemented.

The current patch was passed in 2014 and expired on March 31. Physicians faced a 21 percent cut in Medicare payments if Congress did not pass new legislation.

The prospect of repealing the SGR had attracted bipartisan support in recent years, but lawmakers had been unable to agree on cuts in other areas to fund the repeal.

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