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Friday, February 7, 2014

A Final Replacement for the SGR ‘Doc Fix’?

Has the widely contested Sustainable Growth Rate (SGR) formula for Medicare physician payment finally met its end? Perhaps, according to the AAN Capitol Hill report, now that the House Ways & Means Committee, House Energy & Commerce Committee, and the Senate Finance Committee have all agreed on compromise legislation to permanently repeal the SGR.            


The SGR, originally created by the Balanced Budget Act of 1997, compares actual growth in spending on physician services to a cumulative target growth rate, which is linked to the gross domestic product (GDP). But since the cost of providing care to Medicare patients has, for well over a decade, consistently increased at a rate exceeding GDP growth, the SGR formula as written requires that payments to physicians who treat Medicare patients be cut. In 2002, that cut was supposed to be 5 percent; in succeeding years, the SGR-dictated cut grew larger and larger.


These cuts were obviously untenable and would have driven most, if not all, physicians out of the Medicare pool within a few years. So well over a dozen times since 2002, Congress has passed temporary “patch” bills commonly known as the “doc fix.” Last January, a “doc fix” patch staved off a 27-percent cut. These patches typically only last a few months, so multiple versions must be passed each year.


This newest bill may represent a permanent patch for the SGR. The Senate Finance Committee released this summary of what the proposal would accomplish:

·         Repeal the SGR and end the annual threat to seniors' care, while instituting a 0.5 percent payment update for five years

·         Improve the fee-for-service system by streamlining Medicare's existing web of quality programs into one value-based performance program. It increases payment accuracy and encourages physicians to adopt proven practices

·         Incentivize movement to alternative payment models to encourage doctors and providers to focus more on coordination and prevention to improve quality and reduce costs

·         Make Medicare more transparent by giving patients more access to information and supplying doctors with data they can use to improve care


Still, Mike Amery, Esq. Legislative Counsel at the AAN told Neurology Today in a Feb. 6 article about the SGR "doc fix" that “Congress has yet to identify offsets to the cost, which is the most likely thing to sink the bill. I think there is a decent chance that Congress will be able to agree to the final policy on a bipartisan basis. But this still means that it will have to come up with $110 billion over ten years, as well as any increased cost such as a positive update.” The AAN is analyzing the legislation. Look for a full summary and the implications for neurologists in an upcoming Capitol Hill