House and Senate Committees Approve Bills to Repeal the SGR
The House Ways and Means Committee and the Senate Finance Committee have approved bills that would repeal the Sustainable Growth Rate (SGR) Medicare physician payment formula, and replace it with a program that rewards physicians for meeting currently undefined quality benchmarks.
The bills are fundamentally similar. They would:
- Repeal the SGR
- Allow physicians to continue to be paid on a fee for service basis
- Provide incentives for physicians who participate in alternative payment programs and patient-centered medical homes
- Consolidate all existing federal quality reporting programs into a single program
- Establish bonuses and penalties for meeting certain quality benchmarks, starting in 2017 for performance in 2015. The maximum bonus would grow incrementally to 10% by 2020.
The key difference between the two bills is that the House measure provides for a guaranteed 0.5% annual increase in base fee-for-service payments, for three years. The Senate bill has no increase.
There’s no way Congress can complete action on the legislation before the end of the calendar year. So Congress has approved a budget agreement that would pay doctors at current Medicare rates for three more months, plus a 0.5% increase. This “bridge” measure avoids the disruption that would have been caused if the 24% cut in the payment formula have taken effect on Jan. 1, as previously scheduled.