Physician groups applaud new legislation to repeal SGR

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Renewed efforts to eliminate the flawed sustainable growth rate (SGR) formula have arisen with the introduction of legislation that would permanently repeal the SGR and reform Medicare payment and delivery systems.

Renewed efforts to eliminate the flawed sustainable growth rate (SGR) formula has arisen with the introduction of legislation that would permanently repeal the SGR and reform Medicare payment and delivery systems, and some physician groups are expressing support.

U.S. Reps. Allyson Schwartz (D-PA) and Joe Heck, DO (R-NV) introduced the Medicare Physician Payment Innovation Act on February 6. The bill comes on the heels of an announcement from the Congressional Budget Office (CBO) that reduced the estimate of the cost to repeal the SGR from $245 billion to $138 billion, and calls from healthcare organizations to find a better solution for determining Medicare payments.

“Now is the time to end this failed policy once and for all and protect access to care for seniors now and in the future,” Jeremy Lazarus, MD, president of the American Medical Association (AMA), said this week following the CBO announcement. “We urge Congress and the administration to take advantage of the fact that the cost of repealing the SGR is lower than it has been in many years and move promptly to replace the formula with a new system that encourages quality care while reducing costs.”

Lazarus’ call to action was made just a day before Schwartz’s and Heck’s legislation was introduced. The bill will create a new delivery system and payment reforms that will ensure long-term stability in the Medicare physician payment system and contain the rising growth in healthcare costs, according to a statement from the legislators.

“For over a decade, [the SGR] has failed taxpayers, Medicare beneficiaries and those on the frontlines of patient care. The framework for this legislation has garnered broad bipartisan support over the past year,” Schwartz says. “I look forward to working with Rep. Heck and my Republican and Democratic colleagues on the Ways and Means Committee to pass legislation this year that fully repeals the SGR and moves us toward our shared goals of rewarding quality, providing better integration and coordination of care, and ensuring seniors get the care they need when they need it. There is no excuse for further inaction.”

“There is no single greater threat to the long-term solvency of Medicare and seniors access to healthcare than the broken Medicare payment system, or SGR. Each year, healthcare practitioners are faced with devastating cuts that could make it nearly impossible for them to continue providing care for Medicare beneficiaries. And each year Congress has avoided coming up with a serious solution to this problem,” Heck adds. “This bill is that solution. Our seniors and their healthcare providers deserve a program that is immune to congressional dysfunction and that would provide stability by replacing the currently flawed formula with a system that promotes efficient, cost-effective healthcare.”

Specifically, the bill would not only repeal the SGR formula; it also would provide annual positive payment updates to all physicians for four years. It would ensure access to preventive care, care coordination, and primary care services through increased payments and aggressively test and evaluate new payment and delivery models. The proposed bill would also seek to identify a variety of new payment options for all types of medical providers, stabilize payment rates who show commitment to quality and efficiency within a fee-for-service model, and offer long-term stability in the Medicare physician payment system.

“Over the past decade, the repeated threat of cuts to physician payments resulting from the SGR has brought chaos to the practice environment. It is difficult for physicians to keep their doors open, especially for our members in small or solo practices, with the constant threat of Medicare payments being cut by 25% or more,” says Charles Cutler, MD, FACP, chairman-elect of the American College of Physicians (ACP) Board of Regents. “We enthusiastically support this legislation. It not only addresses the continued threat of the SGR formula, it also moves Medicare beyond a pure fee-for-service payment model toward new models that better align payment with value.”


The legislation has attracted support from several other physician organizations, too, such as the American Academy of Family Physicians (AAFP) and the National Coalition on Health Care.

“The new cost of ending this problem is $138 billion, more than $100 billion below the previous projection and less than the $146 billion Congress has already spent on short-term patches to the SGR over the past decade,” adds Lazarus on behalf of AMA. “This legislation is an important part of the continuing discussion on the future of Medicare and the end of the SGR. We look forward to continuing to work with Reps. Schwartz and Heck and their colleagues on both sides of the aisle to move past the SGR and transition to an array of Medicare delivery and payment options that give physicians the flexibility they need to help lower costs and improve the quality of care for their patients.”


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