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10-02-2013 | Article

Congressional subcommittees waste no time to begin SGR repeal process


Committee on Ways and Means Outline

medwireNews: Widespread support by various physician organizations to repeal and replace Medicare's sustainable growth rate (SGR) reimbursement formula has motivated a congressional committee to begin hearings this week that will seriously consider a more stable and reliable payment system that would gain the confidence of both seniors and physicians.

Texas Representative Kevin Brady, who recently took over as chair of the House Ways and Means Health Subcommittee, will lead the charge to work with the House Energy and Commerce Committee and hammer together legislation to permanently replace SGR.

These two committees together have the authority to do away with SGR and recently released a plan on how to do so. The approach involves providing authorized payment rates for numerous years after the SGR is repealed. Part of the repeal would also ensure that the fee schedule system rewards quality based on performance on "meaningful, physician-endorsed measures" that will also incentivize efficiency.

Originally, the SGR was created to control the growth of Medicare spending by suppressing payments for physician services through linking reimbursement to increases in the gross domestic product. Reimbursement cuts were intended to occur each year since 2003, but have been overridden by Congress.

While the Congressional Budget Office projected that an SGR repeal and the freezing of payments at their current rate for the next 10 years would cost $ 138 billion, it is much better than the $ 271 billion they originally projected it would cost - a projection change that has only fueled the impetus to exterminate SGR.

"Such an investment in funds needs to be accompanied by fiscally responsible fundamental reform of the Medicare fee-for-service (FFS) payment system," said a report that was recently released by Republicans. "We are committed to developing such a reform proposal."

Overall, the motivation to properly update the Medicare payment system by getting rid of SGR is finding common ground among Republicans and Democrats. The latest proposal is actually similar to a recently introduced bipartisan proposal, known as the Medicare Physician Payment Innovation Act, which also aims to repeal SGR and eventually implement new payment and delivery models that would take in to account specialties, practice types, and geographic regions.

By Peter Sergo, medwireNews Reporter