Latest effort to repeal SGR formula calls for 0.5% pay hike

Republican and Democratic leaders on the House Energy and Commerce Committee released the latest version of a draft bill (PDF) to repeal Medicare's sustainable growth-rate formula calling for a five-year period of stable payment increases as physicians transition into new payment models. But lawmakers still offered no way to offset the cost of the repeal.

Totaling 70 pages, the bill is a work in progress, as the panel's health subcommittee will mark up the legislation next week. Committee members—along with members of the House Ways and Means Committee—have worked throughout the year to craft a bill incorporating comments from more than 80 stakeholders. As before, this version of the bill gives providers the option of leaving traditional Medicare fee-for-service to try new payment models that emphasize better quality and lower costs.

In this latest draft, committee members proposed a payment increase of 0.5% each year from 2014 through 2018 for all types of physician services. That payment increase would continue beyond 2018 and physicians would also have the opportunity to receive an additional 1% increase depending on how they perform in a quality incentive update program, according to Republican committee staff.

Although pleased with the five-year period of stability, the American Academy of Family Physicians released a statement that said the legislation doesn't go far enough in helping the nation's primary-care providers, who receive far lower compensation than specialty physicians.

“We are disappointed that the subcommittee's draft does not include a provision to specify a higher base payment rate for those services provided by primary-care physicians,” said the statement from Dr. Jeffrey Cain, president of the AAFP. “We continue to believe that primary care offers the most substantial mechanism to improve healthcare quality overall and reduce the growth of healthcare costs, and that the current fee schedule fails to accurately capture the complexity of modern primary-care services.”

Some experts have proposed rebalancing payments between primary care and specialty physicians as a way of offsetting the cost of the SGR repeal as well as encouraging stronger primary care and patient management. The nonpartisan Congressional Budget Office now estimates the SGR repeal would cost about $139 billion over 10 years.

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