Huge Victory for Medicine: No More SGR!

Shout it from the rooftops: Success (finally)! Last night, medicine achieved the biggest victory since the passage of Texas' 2003 tort reform liability protections. Just hours before a 21-percent pay cut to physicians was set to take effect, the Senate approved the bill to repeal Medicare's fatally flawed Sustainable Growth Rate (SGR) formula, permanently and immediately. 

After 12 years and 17 temporary, cut-averting patches, both sides of the political aisle and both chambers of Congress worked together to pass the Medicare Access and CHIP Reauthorization Act, which was awaiting President Obama's signature early Wednesday morning.

TMA has been strongly advocating for repeal of the SGR for years. In a statement, TMA President Austin I. King, MD, extended his "sincere thanks to the United States Senate — especially our own Sen. John Cornyn — for taking this momentous step."

Indeed, the bill had support from Texas Senator Cornyn, who substantially helped get the bill across the finish line. U.S. Reps. Michael Burgess, MD, and Kevin Brady did some heavy lifting for years to see the bill through to passage. Senator Ted Cruz voted against the legislation.

"Eliminating the constant threat of Medicare payment cuts means that we can focus our energies on improving this new law. We can focus our energies on removing the bureaucratic impediments that get in the way of good patient care. We can focus our energies on enacting substantive and fundamental Medicare reforms that will help us provide lifesaving, life-sustaining, and life-enhancing care to our senior citizens, military families, and Texans with disabilities," Dr. King said, referring to the bill's passage as "13 very long and arduous years in the making." 

"I want to thank my predecessor TMA presidents who have kept the movement alive, the thousands of Texas physicians and patients who have visited and written and called their representatives and senators to demand repeal of the SGR formula, and the lawmakers who heeded our call. And the entire TMA family sends, in particular, a warm and most heartfelt appreciation to U.S. Reps. Michael Burgess, MD, and Kevin Brady and to Senator Cornyn. Their determination and grit over the past two years, obtaining bipartisan agreement on the policy, have made this day possible.”

The bill also contains provisions that protect state liability reforms and ensures the care standards and guidelines in the Affordable Care Act, Medicare, or Medicaid statutes can't be used to create new causes of legal action against physicians. U.S. Rep. Henry Cuellar (D-Texas) worked tirelessly to insert this language into the bill.

If you're a physician who participates in Medicare, you're probably wondering what this means for claims processing. The American Medical Association says Medicare should begin processing claims tomorrow for services provided in April at the rates that were effective before the 21-percent cut was to take effect. Under the provisions of the bill, the fee schedule conversion factor will increase by 0.5 percent on July 1, 2015, and by another 0.5 percent on Jan. 1, 2016.


UPDATE from the Centers for Medicare & Medicaid Services (April 15, 2015): In an effort to minimize financial effects on providers, CMS previously instituted a 10-business day processing hold for all impacted claims with dates of service April 1, 2015, and later. While the Medicare Administrative Contractors (MACs) have been instructed to implement the rates in the legislation, a small volume of claims will be processed at the reduced rate based on the negative update amount. The MACs will automatically reprocess claims paid at the reduced rate with the new payment rate. 

No action is necessary from providers who have already submitted claims for the impacted dates of service.


The bill contains sweeping changes for how Medicare pays doctors. The bill directs the secretary of the U.S. Department of Health and Human Services "to establish a Merit-based Incentive Payment (MIP) system under which eligible professionals (including physicians, physician assistants, nurse practitioners, clinical nurse specialists, and certified registered nurse anesthetists) shall receive annual payment increases or decreases based on their performance." It also "requires specified incentive payments to eligible participants in an alternative payment model."

For more about the legislation, read this section-by-section bill analysis. The AMA has some helpful resources, including highlights from the bill and a chart comparing the new bill to current law.

Action, April 15, 2015

Last Updated On

June 08, 2015

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