The House Finally Passes SGR Repeal, but With a Catch

March 27th, 2015

After years of kicking the proverbial can down the road, the House of Representatives overwhelmingly passed a bipartisan-crafted bill to repeal the Medicare sustained growth rate (SGR) formula. For years, Medicare doctors have seen annual “doc fix” patches passed in Congress to keep physician payment cuts from rising, with little done to come up with a permanent solution.

The bill, entitled Medicare and CHIP Reauthorization Act (MACRA), would eliminate the SGR and replace it with a 0.5% increase in Medicare physician payments from now through 2019. After that, the 2019 payment rates would be maintained through 2025, and in 2026 physicians who participate in alternative payment models would get annual increases of 0.75%, while all other doctors would get 0.25%.

While the bill had the overwhelming support of the House and blessings from groups such as the American Medical Association (AMA), there is, as always, a catch: The Senate adjourned for its two-week spring break today before voting on the bill – and last year’s doc fix patch is due to expire on March 31. Payment cuts may not be immediately felt – Medicare can delay processing of payments until the next session begins in April – but the delay will only bring even more frustration to doctors who have been waiting years for a fix to be passed.

There is also the issue of funding – that is, the $214 billion bill is not fully funded and the Congressional Budget Office estimates that it will add $141 billion to the federal deficit. Higher-income Medicare recipients will shoulder higher out-of-pockets costs, starting in 2018 – a provision that has many senators hesitant. Also of concern in the Senate is the two-year extension of the Children’s Health Insurance Program (CHIP), as many Senate Democrats are pushing for a four-year extension.

Despite Senate concerns about the bill, it is expected to pass once Congress is back in session in two weeks -- mostly by those who are ready to put an end to 18 years of punting on the issue.