Blog Post

Will Congress cash in on the SGR 'sale?'

July 26, 2013

    Hanna Jaquith, Daily Briefing

    This week, the House Energy and Commerce Health Subcommittee advanced legislation that would gradually repeal the widely panned sustainable growth rate (SGR) formula, which determines Medicare physician reimbursement rates.

    The bill would offer annual payment increases of 0.5% from 2014 to 2018, according to a new Advisory Board dashboard that tracks current SGR proposals. And although the House bill does not abolish fee-for-service, it does attempt to incent physicians to shift to alternative payment models, such as accountable care networks, bundled payment programs, and patient-centered medical homes.

    Forgive observers, however, if after more than a decade of botched efforts, there's some skepticism that this year's "doc fix" will be permanent. Year after year, experts tell me that they've seen the same script replayed: CMS announces that the SGR will cut physician payments (by an ever escalating amount), Congress launches a partisan squabble over cost offsets, and eventually decides to kick the can down the road.

    "It seems like every year there's an extra edge as to why there might be reform," Chris Sawyer, an analyst on the Advisory Board's Physician Practice Roundtable, told me. "Last year, it was the fiscal cliff negotiations—obviously it didn't get solved, so we got another year to ask this question," he added.

    However, he did point out that lawmakers are eager to take advantage of the current SGR repeal "sale." In February, the Congressional Budget Office estimated that the new cost to repeal the SGR and freeze physician payments for the next 10 years is $138 billion, a more than 40% drop from its August 2012 prediction of $245 billion. Lawmakers "are hoping to get it while the numbers are good," Sawyer said.

    Additionally, he noted that lawmakers' rationale for delaying the payments cuts until the end of this year was to provide more time to come up with a serious proposal. As such, there's reason to believe that an SGR fix could be part of future budget debates.

    Still, despite a reasonable amount of support for the House Subcommittee proposal, Sawyer stressed that we are still in the "easy" stages of debate. Few legislators have come out and said exactly how they'd pay for an SGR fix—a major sticking point that has derailed past attempts.

    "There's certainly hope for a fix this year," Sawyer said, but "it's far from a slam dunk."

    Access Our New Dashboard

    The Physician Practice Roundtable's new Sustainable Growth Rate Dashboard tracks the recent SGR reform proposals put forward in Congress, with overviews of the leading reform proposals and how each will affect physicians.

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