The 114th Congress has made fixing the Sustainable Growth Rate (SGR) formula, which is a method used by the Centers for Medicare and Medicaid Services (CMS) in the United States to control Medicare spending on physician services, a priority but the question about how to pay for it remains. There’s widespread agreement on both sides of the aisle that Medicare’s payment system needs to be replaced— that’s a good start, considering the current emergency spending authorization, or ‘patch’ is set to expire on March 31.
Stop me if all this sounds vaguely familiar.
You’ll recall that Congress came close to coming up with a solution when the House passed the SGR Repeal and Medicare Provider Payment Modernization Act (HR 4015) in March 2014. But it died in the Senate because there was no consensus on how to fund the fix.
Nonetheless, members of House Energy and Commerce Health Subcommittee, which met this past January 21 and 22, seem to be optimistic that a fix can be found.
In his opening remarks, the chairman of the subcommittee, Joe Pitts, (R-PA), called finding a permanent replacement for SGR the paramount issue facing the health panel. “This subcommittee has made permanent repeal of the flawed SGR a top priority for the last 4 years. In 2014, we reached a bipartisan, bicameral agreement on a replacement policy that enjoys widespread support both in Congress and among the stakeholder community,” he said.
“We’ve got the bill, we’ve got a draft, we’re ready to go,” said Rep. Michael Burgess (R-TX) after the hearing on January 21. Burgess is an obstetrician who authored HR 4015. “All it takes is us agreeing to the offsets.”
A permanent repeal would cost about $118.9 billion. Rep. Gene Green, a Democrat from Texas, said the figure was the cheapest he’d seen since the SGR was created. He also said that he wanted a fix but not at the expense of physicians or patients.
Calling for expediency, Rep. Frank Pallone, a New Jersey Democrat, said, “After this hearing we should wait no longer to roll up our sleeves and get down to the work of ensuring that the bipartisan and bicameral bill agreed to last year is enacted into law.”
Pallone is the ranking minority member on the full Energy and Commerce Committee.
Pitts noted that any repeal of the SGR won’t get very far unless lawmakers include spending cuts to pay for the fix. “As a practical matter, the House leadership has said bills must be offset before they can be heard on the House floor,” Pitts said.
The SGR formula was created in 1997 and ties Medicare’s payment rates for doctors to the projected growth of the national economy. But as spending outpaced economic growth a multibillion dollar gap arose in funding for Medicare. Last year’s ‘patch’ was the17th that Congress passed.
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