Next week, the House Energy and Commerce Committee is scheduled to begin marking up legislation that would permanently repeal and replace the sustainable growth rate (SGR) formula, which determines Medicare physician reimbursement rates.
Numerous times Congress has passed "doc fix" legislation to delay cuts mandated by the SGR, though physicians face substantial reductions in their Medicare reimbursements each time the legislation expires. The most recent doc fix delayed the cuts until January 1, 2014, at which time physicians face about a 25% cut. Over the last few months, Committee leaders have released updates to the draft legislation, described as a “legislative framework." The framework would replace the SGR with an enhanced fee-for-service system, in which providers would get payment updates and incentives based on certain quality measurements. However, providers would have the flexibility to opt out and participate in alternative payment models.
Prospects for a permanent repeal increased in February, after the Congressional Budget Office's budget projections dramatically reduced the cost of eliminating the SGR from $300 billion over 10 years to $138 billion over 10 years.