Closing in on another SGR deadline

Maybe the 18^th time is the charm?

After 17 temporary patches to the Medicare sustainable growth rate (SGR) formula, a permanent solution seems closer than ever before. If the legislation introduced this week, based largely on negotiations from last year’s “doc fix” debate, is passed, the yearly ritual of staving off physician pay cuts finally will come to an end.

Identical bills introduced in the House and Senate by a bipartisan coalition would repeal the current SGR and institute a 0.5 percent payment update each year for five years. The proposal, with an estimated cost of $210 billion over 10 years, would stop a 21.1 percent cut to physicians’ Medicare payments set to begin April 1 under the current formula. It also includes a number of other provisions to emphasize value in healthcare and cut costs by asking higher income beneficiaries to pay more.

In a somewhat heartening change from typical partisan gridlock, it seems like everybody wants to get the job done this time. Just before the bill was introduced, more than 700 medical associations, including dozens of national and state-level imaging societies, signed a letter to House Speaker John Boehner (R-Ohio) calling on Congress to pass the proposal that “would not only eliminate the dysfunctional SGR formula, but also create new pathways for physicians to participate in alternative payment and health care delivery models that emphasize value over volume and have the demonstrated potential of reducing long-term spending growth across the Medicare program.”

You don’t need to tell the medical associations how big of a deal this would be, but it also seems like legislators are more on the same page than they have been previously. In an article for Talking Points Memo, congressional reporter Sahil Kapur wrote that if the bill passes, it would be a “huge achievement for a Congress that has so far been marked by unusual dysfunction” and the most important piece of healthcare legislation since the Affordable Care Act. Kapur noted the draw for both political parties: Republicans get spending reforms through Medicare means-testing and spending reductions on supplemental Medigap plans, while Democrats preserve Medicare for the middle class and they also would get an extension of the Children’s Health Insurance Program.

If there’s going to be a stumbling block, it will be disagreements over how to pay for the legislation, and some hardline fiscal conservatives are saying the price tag is too high. The Committee for a Responsible Federal Budget, a public policy think tank, wrote that in addition to the costs in the first decade, there would be nearly $140 billion in interest payments through 2035, as well as high second-decade costs due to continued growth in annual payments and an extension of qualifying individual assistance. Robert E. Moffit, PhD, director of the Center for Health Policy Studies at the Heritage Foundation, wrote a column warning of the costs of an unfunded Medicare doc fix and calling for more competition and choice within Medicare to bring costs down.

We’ll know before the end of the month whether we’ll be saying “See you later” to the SGR or “See you next year” for another round of doc fix debate.

-Evan Godt
Editor – Health Imaging