US House Set to Vote on Bill that Includes New Proposal to Address SGR

The US House of Representatives is expected to consider early next week a new proposal that addresses the Sustainable Growth Rate (SGR) used to determine the Medicare physician reimbursement fees. The proposal is being incorporated into H.R. 4213 – The American Jobs and Closing Tax Loopholes Act of 2010. The SGR proposal would seek to avert the 21 percent cut in Medicare physician payments that is scheduled to take effect on June 1, 2010.  The Senate is expected to take up the bill shortly after it is passed by the House.

The AMA says the proposal contains several elements:

  • 1.3 percent Medicare payment update for the remainder of 2010
  • 1.0 percent payment update in 2011
  • Updates for 2012-13 established under two expenditure targets
  • SGR formula resumes in 2014 to reflect current law

The two expenditure targets are patterned after those proposed in HR 3961, which passed the House last year. According to the AMA, an expenditure target for evaluation and management and preventive services will be set at GDP plus two percentage points; a separate expenditure target for all other physician services will be set at GDP plus one percentage point.  These targets are more generous than the current SGR, which is set at GDP with no additional growth allowance.  During the two-year period when the twin targets are in place, an update floor will be set at zero to prevent any conversion factor cuts in 2012-13.

The proposal is similar to one outlined earlier this week but was scaled back due to objections in the Senate over cost.  The AMA adds that a small reserve fund may be set aside for the remainder of 2010, in the event Congress chooses to revisit the issue and make further adjustments to the payment formula.

AMA President J. James Rohack, MD, says that the intervention to delay the scheduled Medicare physician payment cut “will provide temporary stability for seniors and their physicians, but the AMA is deeply disappointed that Congress will once again fail to permanently correct the Medicare physician payment formula that Republican and Democrat members of Congress, President Obama and policy experts have said should be repealed.” Read his entire statement here

The NCMS continues to seek a permanent fix for the flawed SGR and has been urging the North Carolina Congressional Delegation, on a daily basis,  to fix  the flawed Medicare formula.

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