Congress Moves Toward Temporary Medicare Fee Hike, SGR Repeal

The annual avert-the-impending-Medicare-disaster effort is in full swing as Congress tries to avoid a devastating cut in Medicare payments to physicians caused by the Sustainable Growth Rate (SGR) formula. If that effort does not succeed, physician fees will be cut 23.7 percent on Jan. 1.

But on Dec. 12, as the holiday recess loomed, the House of Representatives approved a three-month, 0.5- percent increase through the end of March. The increase is part of a two-year federal budget agreement the House approved 332-94. The Senate approved the measure Dec. 18. The agreement sets overall discretionary spending for the 2014 fiscal year at $1.012 trillion and appropriates about $63 billion in relief from budget cuts caused by sequestration over two years through savings elsewhere in the budget. The deal also provides $85 billion in mandatory savings, including about $28 billion over 10 years, by requiring President Obama to sequester the same amount of mandatory budget resources — to Medicare and other programs — for an additional two years through 2023.

Momentum toward repealing the SGR continues to build. Also on Dec. 12, the House Ways and Means Committee and Senate Finance Committee approved legislation replacing the SGR with a payment system that rewards quality over volume. The House Ways and Means Committee bill provides 0.5-percent updates for three years, then freezes physicians' Medicare payments for seven years. The Senate Finance Committee bill keeps the payment rates the same for 2014 through 2016, then imposes progressively deeper cuts starting at 4 percent in 2017 and increasing to 10 percent by 2020.

Medpage Today reported that a draft from the two committees says a "value-based performance payment program" would create a single, budget-neutral incentive payment program. Medpage said the draft states that "by combining the current quality incentive programs into one comprehensive program, this proposal would further value-based purchasing within the overall Medicare program while maintaining and improving the efficiency of the underlying structure with which professionals are already familiar."   

Differences in the House and Senate versions will have to be resolved through negotiations among Ways and Means, House Energy and Commerce, and Senate Finance members and staff. Congress will have to agree on payment levels for physicians.  The American Medical Association has compiled a side-by-side table comparing current law with bills approved by the three committees.

The Texas Medical Association joined state medical societies in Arizona, California, Florida, Louisiana, Oklahoma, New York, North Carolina, and South Carolina in sending congressional leaders a letter asking them to address several priority issues in the SGR payment reform legislation. The associations make up the Coalition of State Medical Societies, which represents 158,500 physicians and medical students.

The coalition asked Congress to:  

  • Provide positive automatic payment updates,  
  • Eliminate the fee-for-service program penalties, and  
  • Revise or eliminate adoption of the ICD-10 coding system.    

Action, Dec. 16, 2013 (Revised Dec. 20, 2013)

Last Updated On

January 13, 2014

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