Healthcare Business News

Cost of SGR repeal lowered to $116.5 billion over 10 years

By Andis Robeznieks
Posted: December 9, 2013 - 2:00 pm ET

The holiday markdowns continue. A repeal of the Medicare sustainable growth-rate physician payment formula can now be had for $116.5 billion over 10 years, according to the Congressional Budget Office.

The CBO previously put the cost of an SGR fix at $297 billion and then lowered that to $138 billion because of slower projected growth in Medicare spending. The newest projection is based on a proposed 10-year freeze of physician payment rates. If doctors were to receive annual increases of 0.5%, the cost escalates to $136.1 billion.

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The Senate Finance Committee is scheduled to discuss repealing and replacing the formula Dec. 12, but no details about that meeting have been posted and representatives for Sen. Max Baucus (D-Mont.), the committee's chairman, could not be reached for comment. Baucus and ranking minority committee member Sen. Orrin Hatch (R-Utah) have said that budgetary offsets for an SGR replacement would be addressed separately.

If no action is taken, the CBO has calculated that the physicians' Medicare payment will be slashed by 23.7% on Jan. 1.

“The remarkable slowdown in the growth rate for Medicare spending on physician services is reflected in Congressional Budget Office's newly reduced cost estimate for replacing the failed SGR payment formula,” Dr. Ardis Dee Hoven, president of the American Medical Association, said in a statement. “The new estimate serves once again to demonstrate the timeliness of congressional action to reform the Medicare physician payment system once and for all.”

House Ways and Means Chairman Dave Camp (R-Mich.) said in a statement last week that he expects his committee to take action on legislation drafted in tandem with the Senate Finance Committee before Congress adjourns Dec. 13 for the holiday recess.

But nothing on House calendar indicates such consideration is on the docket.

With time running out on the calendar and no legislation on the table to offset the cost of SGR repeal, some physician organizations are becoming pessimistic that a permanent solution will be reached in 2013.

“Happy to see House W&M and Senate Finance will mark up #FixSGR next week,” Derek Brandt, a lobbyist for the American Academy of Neurology, tweeted Dec. 5. “Unfortunately discussion will continue into 2014.”

Follow Andis Robeznieks on Twitter: @MHARobeznieks

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