House passes two-year budget agreement, three-month SGR fix -AND- CMA Applauds Historic Movement of Medicare SGR Payment Reform Legislation, Urges a Stable Fix in 2014

Mon Dec 16 02:15:19 PST 2013

December 13, 2013

House passes two-year budget agreement, three-month SGR fix

AHA News Now

The U.S. House of Representatives last night voted 332-94 to approve a two-year budget agreement that would give federal agencies more flexibility under the budget sequester for fiscal years 2014 and 2015. The Bipartisan Budget Act would reduce spending by $85 billion and replace $63 billion in sequester cuts with new revenue through fees. Among other changes, it would extend by two years (through 2023) the 2% sequester cut for Medicare providers under the Budget Control Act; delay the start of the Medicaid Disproportionate Share Hospital payment cuts under the Patient Protection and Affordable Care Act until FY 2016; revise long-term care hospital payments; and extend Medicare policies important to small and rural hospitals. The bill also would increase Medicare payment for physicians under the Physician Fee Schedule by 0.5% from January through March, which would temporarily avert a 20.1% payment cut effective Jan. 1 under the Sustainable Growth Rate formula for fee schedule updates. The Senate is expected to take up the bill next week. To prevent the physician payment cut longer term, the House Ways and Meansand Senate Finance committees yesterday approved separate bills to replace the SGR formula with a value-based payment program starting in 2017.

December 12, 2013

CMA Applauds Historic Movement of Medicare SGR Payment Reform Legislation, Urges a Stable Fix in 2014

California Medical Association

The California Medical Association (CMA) is pleased that legislation aimed at repealing the Medicare sustainable growth rate (SGR) was approved in the Senate Finance Committee and the House Ways and Means Committee today.

This is good news for California physicians, who have been working with both committees to revise the initial draft of the legislation since it was introduced in October. For more than a decade, Medicare’s flawed SGR formula has plagued policymakers and physicians, alike, often calling for reductions in payments to physicians despite the rising costs of providing health care. According to the formula, Medicare payments would be cut by roughly 24 percent in 2014, if no action were taken.

Congress has included a three-month SGR patch—with a 0.5 percent payment raise—as part of the federal budget agreement, which will help avoid these cuts on January 1, 2014, while a long term SGR solution is put in place.

As the estimated cost to repeal the SGR continues to decrease, California physicians are hopeful that Congress will finally act to eliminate it and replace it with a more stable payment system.  The cost is now expected to be $116 billion over the next 10 years, according to the Congressional Budget Office (CBO), down from previous estimates of both $138 billion earlier this year and $271 billion the year before.

"With the drastically reduced price tag of $116 billion, Congress must seize the opportunity to set Medicare on a more stable course for current and future generations of physicians and patients," says CMA President Richard Thorp, M.D. “While the bill still needs work, CMA supports moving the bills through committee to continue to move the process forward. This is the most progress Congress has made on Medicare physician payment reform in a decade and we need to keep the momentum going.”

In addition to repealing the SGR formula, the legislation currently before Congress also includes several provisions intended to reform the Medicare system, including automatic payment updates in the initial years, incentives to participate in new payment models, a phase-in period and funding assistance to help small practices transition to new payment models and retention of a fee-for-service program.

The House bill also now includes the California geographic payment locality update ("GPCI fix"), which would transition the outdated payment localities to the current and regularly updated metropolitan statistical areas used to calculate payments to hospitals. The Senate bill, however, does not include a GPCI fix. CMA will be working to include it in the final conference agreement.

Bryan Sloane
Deputy Editor, CAL/AAEM News Service

Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service

Contact us at: calaaem.news.service1 at gmail.com

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