Recently, proposals have been unveiled on Capitol Hill that would eliminate Medicare’s sustainable growth rate (SGR) formula. On February 6, Reps. Allyson Schwartz (D-PA) and Joe Heck, DO (R-NV) reintroduced H.R. 574, the Medicare Physician Payment Innovation Act, which permanently repeals the SGR, provides positive updates for four years, and tests a variety of new payment models to provide options for physicians across medical specialties, practice types, and communities. The legislation also includes higher annual payment updates for primary care physicians during this four-year period of stability. In later years, higher payments will be provided to physicians who achieve gains in quality, effectiveness, and cost, while those who choose to retain the current fee-for-service payment models will experience pay cuts. There is an exemption process to avoid negative updates for physicians who are unable to make a transition to new models.
The Republican leadership of the House Ways and Means Committee and Energy and Commerce Committee also unveiled an outline of an SGR repeal proposal. That framework would eliminate the SGR and provide a period of stable payment rates. It would also base fee schedule updates on physician performance as measured by physician-endorsed quality measures.
At an American Medical Association conference, House Energy and Commerce Committee Chair Fred Upton (R-Mich.) noted that a recent report by the Congressional Budget Office lowered its 10-year cost estimate for eliminating the SGR, from $245 billion to $138 billion. Upton said the report offers “a window of opportunity” for change, adding that it is “a very large amount but a smaller mountain to climb.”