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Healthcare Business News

Legislation to repeal SGR clears House, Senate panels

By Jessica Zigmond
Posted: December 12, 2013 - 4:15 pm ET

House and Senate committees voted Thursday to advance legislation that would repeal Medicare's sustainable growth-rate formula for paying physicians, even as the budget deal reached this week could mean it's most likely Congress will adopt another short-term fix and come back to the perennial challenge next year.

In the morning, the House Ways and Means Committee unanimously approved legislation that would not only repeal Medicare's sustainable growth-rate formula but also replace it with a payment system that rewards quality and performance over volume. That legislation would provide a 0.5% payment update through 2017 and would maintain stable payments through 2023. In 2024, all Medicare professionals would receive annual updates of 1%, while those in alternative payment models would receive a 2% update.

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That was followed in the afternoon by the Senate Finance Committee's approval of similar legislation to repeal the SGR. Members and staff of both committees have worked on a joint framework, though the bills are not identical. In considering amendments to its legislation, the Senate Finance Committee approved the Excellence in Mental Health Act, a bill introduced earlier this year by Sens. Debbie Stabenow (D-Mich.) and Roy Blunt (R-Mo.) to expand access to mental healthcare services throughout the country. Supported by more than 50 mental health organizations and co-sponsored by a bipartisan group of senators, the legislation requires more coordination between mental health providers and other healthcare providers, and it would establish pilot programs in 10 states to strengthen access to care.

The American Medical Association praised the work of both committees Thursday, saying both panels have made tremendous progress on the problem that Senate Finance Committee Chairman Max Baucus (D-Mont.) said has cost Congress about $150 billion on temporary patches.

“Today's strong, bipartisan votes by the Senate Finance and House Ways and Means Committees, following similar action last July by the House Energy and Commerce Committee, shows there is overwhelming, bipartisan support for ending SGR in a fiscally responsible manner and closing the book on the annual cycle of draconian Medicare physician payment cuts and short-term patches,”

Dr. Ardis Dee Hoven, president of the American Medical Association, said in a statement.

At the same time, lawmakers are expected to attach amendments (PDF) to the bicameral, two-year budget agreement that Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan (R-Wis.) unveiled Tuesday night that would extend Medicare's current payment update to physicians through March 31, 2014. The amendments also extend certain Medicare programs.

And lawmakers have yet to propose any way to pay for replacing the SGR, even though the non-partisan Congressional Budget Office recently estimated it will now cost $116.5 billion over 10 years--a bargain compared with earlier projections that went as high as nearly $300 billion.

“Though the score is the lowest ever, it must be paid for,” House Ways and Means Committee Chairman Dave Camp (R-Mich.) said in his opening statement Thursday. “And I am of no illusion that finding payfors will be an easy task; it will be very difficult,” he added. “Which is why we must keep the cost low, not just to make this more likely it will pass, but also to ensure limited taxpayers' dollars are spent wisely.”

Follow Jessica Zigmond on Twitter: @MHjzigmond

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