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Congress Weighs Proposal to Eliminate Medicare SGR Formula

Posted in Legislation and Public Policy, Medicare and Medicaid, Reimbursement Matters

On March 13, details emerged about negotiations in the U.S. House of Representatives regarding a proposed Congressional deal to solve the annual “doc fix” problem. As previously discussed here, Congress is required to take action annually in order to undo impending statutory payment reductions to physicians who treat Medicare patients. The latest Congressional “doc fix” proposal includes a permanent repeal of the Sustainable Growth Rate (SGR) formula used to calculate physician fee schedule changes for Medicare payments and a two-year extension of the Children’s Health Insurance Program (CHIP). The total cost of the proposal is more than $200 billion, only a portion of which will be funded by spending cuts.

The current Congressional proposal is the latest in an annual ritual in which Congress fails to adopt similar proposals to repeal the SGR and instead implements temporary delays in Medicare payment cuts. As was previously discussed here, in March 2014 Congress reached a deal to delay cuts in payments to Medicare providers for 12 months. The 2014 Congressional deal was a temporary stop-gap intended to give Congress more time to develop and negotiate a permanent repeal of the SGR.

The 2014 Congressional deal is set to expire on March 31, 2015. If Congress fails to adopt the current “doc fix” proposal or fails to otherwise act to delay cuts in Medicare payments, providers will face a decrease in payments of approximately 21% for the treatment of Medicare patients.
Negotiations between House Speaker John Boehner and House Minority Leader Nancy Pelosi on the details of the current “doc fix” proposal and funding for the proposal are ongoing. As the expiration of the current payment cut delay is looming, it remains to be seen whether Congress will reach a deal to permanently repeal the SGR or whether Medicare payment cuts will be delayed for another year, continuing the annual ritual.

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