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House passes permanent repeal and replacement for Medicare's Sustainable Growth Rate

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Washington, March 27, 2015 | comments
U.S. Congressman Mac Thornberry (R-Clarendon) voted Thursday in support of a bill that permanently repeals and replaces Medicare’s Sustainable Growth Rate (SGR) system. The “H.R. 2” passed by a vote of 392-37.
 
The bill permanently repeals the SGR and ensures a 5-year period of annual updates to transition to a new system that will be based more on rewarding provider performance.  If Congress had failed to act, physicians who accept Medicare would have seen a 20 percent reduction in payments, ultimately resulting in fewer doctors who accept Medicare patients and limiting health care options for seniors who use Medicare. It also includes an extension for a number of Medicare payment programs important to our rural hospitals.
 
“Congress has enacted 17 ‘patches’ to stop Medicare physician payment cuts since 2003. Trying to solve this problem with a short-term fix each year is like trying to heal a gunshot wound by putting new Band-Aids on it every so often,” Thornberry said. “These temporary fixes cost money each year and only continue a vicious cycle of uncertainty for doctors and their patients.”
 
The SGR was created as a part of the Balanced Budget Act of 1997 and was designed to control Medicare costs with a formula for the payments that Medicare providers receive. The SGR formula triggers across-the-board reductions in payments when overall physician costs exceed target expenditures. SGR does not account for efficiency, quality of care, or performance of the physicians, so all Medicare providers see reductions in payment regardless of the quality of care and service they provide patients. Since 2002, Congress has used a series of temporary fixes, known commonly as the “doc fix,” on a semi-annual basis to prevent the reduction in payments. 

“This legislation is a long-term solution to a very serious problem. Most importantly, it will provide doctors and patients more certainty,” said Thornberry. 

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Tags: Medicare