High costs of repealing SGR slow progress

August 25, 2013

Progress on repealing the sustainable growth rate formula has stalled in Congress due to disagreement over how to pay for it.

A U.S. House of Representatives Committee voted to abolish the sustainable growth rate (SGR) formula, but the abolition’s progress stalled after lawmakers failed to address how to pay for it, reports the American Academy of Family Physicians (AAFP). Estimates of SGR’s repeal costs vary between $139 billion and $200 billion.

The AAFP and the American College of Physicians have lobbied Congress to repeal SGR this year and replace it with a system that recognizes the complexity of primary care office visits and strengthens the role of primary care in the healthcare system. Without the SGR repeal, physicians face the continued threat of 25% reductions to Medicare payments.

In a June letter, the AAFP told Congress that performance measures should  be only one component of payment reform.

“You need to include payment for the coordination of care across delivery settings and for complex conditions,” the letter stated. “Finally, the system should include payment for services rendered, which fee-for-service does. But the AAFP believes (and the evidence shows) the balance of these three elements-namely, fee- for-service, care coordination and performance improvement-should be focused on primary care.”