AMA Wire

Wednesday, Feb. 20, 2013

This Week's News

Lawmakers aim to repeal SGR formula this year, seek physician insight

Lawmakers aim to repeal SGR formula this year, seek physician insight

Two influential congressional committees have set their sights on repealing Medicare's failed sustainable growth rate (SGR) formula this year, announcing plans to reform the program's physician payment system using many of the principles the AMA and other medical associations proposed in October.

Speaking at the AMA's National Advocacy Conference last week, Rep. Fred Upton, R-Mich. (above), chairman of the U.S. House Energy and Commerce Committee, said his committee and the U.S. House Ways and Means Committee plan to introduce legislation to eliminate the SGR formula before Congress' August recess.

"Our goal is to get it done this year, to actually have it on the House floor before the end of the summer—July or the first week of August," Upton said.

The bill is in the early drafting stages, and Upton said that physicians must have a strong hand in developing the details of the plan.

"It's essential that we have input from you," Upton said. "That is the only way it will work."

The framework for the bill outlines three phases, beginning with elimination of the SGR formula and gradually moving to payment based on specialty-specific quality measures developed by physicians. High-performing physicians also would be eligible for additional payments based on efficiency.

The Energy and Commerce Committee held its first hearing on the SGR formula Feb. 14. National policy experts testified about ways to best employ data, measures and models to build a durable Medicare physician payment system.

Also this month, Rep. Allyson Schwartz, D-Pa., and Rep. Joe Heck, DO, R-Nev., reintroduced the Medicare Physician Payment Innovation Act, a bill that would permanently repeal the SGR formula and test a variety of new payment models during a period of positive payment updates. The bill aims to implement new payment options that would promote quality and reduce costs.

Both plans reflect the core principles and elements the AMA and 110 other medical associations submitted to Congress in October as the foundation for a new, high-performing Medicare system. Read a recent guest column by AMA President Jeremy A. Lazarus, MD, on physician blog KevinMD.com to learn more about these principles.

The members of Congress also are eager to seize what Upton called a "window of opportunity" to pass such legislation this year. The Congressional Budget Office (CBO) released a dramatically revised estimate for the cost to repeal the SGR formula. The CBO places the cost this year at $138 billion—down from $244 billion in 2012.

The AMA plans to work with the representatives and their staff as they develop the details of their proposals.

Email your members of Congress to tell them now is the time to repeal the SGR formula.