Lawmakers Pass Legislation to Repeal and Replace SGR
Thursday, April 16, 2015

On Tuesday, Congress approved a bipartisan agreement that repeals Medicare’s sustainable growth rate (SGR) formula for physician payments and replaces it with a system focused on quality, value, and accountability. The SGR formula was passed into law in 1997 to control physician spending, but, since 2003, Congress has spent almost $150 billion in short term patches to avoid unsustainable cuts imposed by the SGR. The most recent patch expired on March 31.

The bill repeals the SGR and replaces it with a 0.5% annual payment increase for physicians for five years, with annual updates to the Medicare Physician Fee Schedule payment rates ranging from 0 to 0.75%, signaling continued slow payment rate increases. Among other things, the bill prevents a 21% pay cut to physicians, places additional emphasis on revenue tied to quality, provides two years of CHIP funding, and leaves ICD-10 implementation intact.

President Obama has promised he will sign the bill into law. A summary of the agreement may be found here

 

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