House passes SGR repeal bill, includes delay to individual insurance mandate

March 14, 2014

Legislation that will change Medicare’s SGR passed through the House of Representatives on Friday, though an amendment that delays a penalty for the individual mandate of the ACA is causing Democrats to oppose the bill.

The latest effort to repeal Medicare's sustainable growth rate (SGR) may be defeated by a partisan fight over the Affordable Care Act (ACA).

Legislation to repeal the SGR was approved by the U.S. House of Representatives on Friday, though a Republican-backed amendment that delays a penalty for the individual mandate of the Affordable Care Act (ACA) caused House Democrats to oppose the bill and predict its defeat in the U.S. Senate.

The SGR Repeal and Medicare Provider Payment Modernization Act passing the House is the first step toward revamping the payment formula that calculates how much physicians are reimbursed for Medicare services, and sets a standard industry-wide for how insurance companies pay providers. The reform effort would replace the SGR with a formula that would tie payments with quality metrics.

But an amendment to the bill would require a five-year delay to tax penalties tied to the ACA's individual mandate, the law's key provision, allowing the uninsured to go without insurance until 2019. Democrats have been vocal against the amendment, accusing Republicans of using the SGR fix as a way to push anti-ACA legislation, and passage in the Democrat-controlled Senate is unlikely.

The American Medical Association (AMA) has worked for the last 10 years to repeal SGR. Ardis Dee Hoven, MD, president of the AMA says that partisan politics is hindering the process of reform.

“While the House has not been able to bridge this partisan divide to date, it is time to move forward,” Hoven said in a statement. “AMA will continue to work with Congressional leaders to get us to the finish line in enacting a solution based on a framework that both chambers and the president can accept. Continuing the cycle of kicking the can down the road through temporary patches in the months ahead simply wastes more taxpayer money to preserve a bad policy of Congress’ own making.”

Reid Blackwelder, MD, president of the American Academy of Family Physicians referred to the House vote on the legislation as “collateral damage.”

 

"It’s imperative that both parties come together to reach agreement on the budgetary payment that will pass both the House and the Senate before April 1,” Blackwelder said in a press release. “Without such action, Congress will regress to the time-consuming, expensive and destabilizing temporary patches that have threatened the health security of millions of their elderly and disabled constituents for more than 10 years.”

Congress established the SGR in 1997 as a way to control healthcare spending by linking Medicare payments to the economy’s overall inflation rate. Actual reductions rarely took place, however. Since 2003, Congress as enacted annual “patches,” that have totaled up to $150 billion, in order to maintain a sustainable level of reimbursements. Physicians will see a 24% decrease in Medicare reimbursement unless legislation, either repeal of the SGR or another temporary fix, is passed by March 31.

 

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