Representatives Joe Heck (R-Nev.) and Allyson Schwartz (D-Pa.) unveiled legislation (HR 574) that would permanently repeal the sustainable growth rate formula (SGR), which sets Medicare physician reimbursement rates.

Congress routinely has passed legislation to delay the SGR cuts, but physicians face substantial reductions in their Medicare reimbursements each time the “doc fix” expires. The most recent doc fix delays the cuts until January 1, 2014, at which time physicians face a 25% reduction to the Medicare reimbursement rates.

HR 574 would maintain current physician reimbursement levels through next year. It then would instruct CMS to develop and test new payment models for the next five years. From 2015 to 2018, reimbursement rates would increase by 2.5% annually for primary care physicians and 0.5% for all other doctors. Physicians then would be called to adopt a replacement model approved by CMS. The legislation aims to replace the SGR with a system that rewards physicians for quality care, instead of the current fee-for-service system.

However, it is unclear how the bill’s costs would be offset. The chances of Congress passing legislation to repeal the SGR may have increased after the Congressional Budget Office released a report that lowered the estimated cost of repealing the SGR from about $245 billion over 10 years to $138 billion.