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Bipartisan lawmakers strike deal to repeal SGR, set physician pay increases

February 6, 2014
by Pamela Tabar, Editor-in-Chief
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A bipartisan team of lawmakers has announced a deal that would repeal the sustainable growth rate (SGR) formula for calculating physician reimbursements under Medicare and provide a physician payment increase of 0.5 percent for next five years.

"We have a real opportunity to repeal the SGR once and for all to provide seniors, and the doctors who care for them, some much-needed certainty," House Ways and Means Committee Chairman Dave Camp (R-Mich.) said today. "This legislation today provides stability for physicians so they will no longer face the uncertainty of massive cuts, but also begins the process of improving how we pay for medical care to focus on positive results for seniors. The time to act is now and provide a permanent solution for the Medicare program millions of seniors rely on."

The SGR formula has been a bone of contention for decades, and most physician groups and Medicare service providers have been in favor of repealing it. What lawmakers haven't decided yet is what payment system will replace it--but most industry leaders support a system that would replace the fee-for-service model with a system that rewards for care quality rather than quantity.

"For far too long, the doc fix has been annual ritual for Congress," noted Senate Finance Committee Ranking Member Orrin Hatch (R-Utah) in today's announcement. "It's time to put that ritual to an end so the millions of seniors who rely on Medicare have greater security and greater access to their doctors.”

The House Ways and Means Committee and the Senate Finance Committee jointly had released a bill to repeal the SGR in November, but the bill was still under revisions as 2013 came to a close. In December, Congress had passed a three-month extension to the SGR to give congressional negotiating teams time to finalize the deal, leading to today's agreement among the team members.

"For years, Medicare payments to doctors have been at risk of being slashed, limiting seniors’ access to high quality care," Senate Finance Committee Chairman Max Baucus (D-Mont.) said when the November bill was introduced. "Enough with the quick fixes. Our proposal is for a new physician payment system that rewards value over volume. It will go a long way in improving the efficiency and quality of care for America’s seniors."

The legislation awaits the voting process in both the House and the Senate.