Last week the Congressional Budget Office (CBO) released a revised scorefor fixing the Sustainable Growth Rate Formula (SGR), the formula by which Medicare reimburses physicians. Unless Congress acts by January 1, 2013, physicians and (other health care professionals) who treat Medicare beneficiaries will be hit with a 27 percent cut in their reimbursement. According to CBO’s latest report, it costs more than $18 billion to freeze physicians’ reimbursements at their current level for 2013.
SGR cuts are nothing new, though the amount of the cuts has varied over the years. For over a decade Congress has enacted legislation to temporarily prevent the cuts from taking place. In this Congress committees of jurisdiction – Senate Finance, House Energy and Commerce, and House Ways and Means – have held hearings or discussions on ways to fix the SGR, but so far there has been no consensus on how to move forward. Cost of replacing the SGR has certainly hampered efforts to develop a fix. CBO estimates that replacing the SGR formula can cost as much as $376.6 billion over 10 years. With very few legislative days remaining in this Congress, and what promises to be a lively lame-duck session, at this point many predict that Congress will once again enact a temporary fix to the problem.©2013 Drinker Biddle & Reath LLP. All Rights Reserved