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Bipartisan lawmakers unify SGR fixes

House, Senate lawmakers propose merged Medicare physician payment bill to repeal SGR

Lawmakers took another step toward repealing the reviled sustainable growth rate formula that sets physician payment in the Medicare program, but they still haven’t figured out how to pay for it.

House and Senate lawmakers from both sides of the aisle agreed to a single piece of legislation – the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 – on Thursday. The proposed legislation merges three proposed pieces of legislation to offer a single view from Congress on how it would create a permanent Medicare physician payment system to reward quality, coordination and prevention and movement toward alternative payment models.

[See also: 'Doc fix' advances to full House]

The proposed legislation would also improve the fee-for-service system by streamlining Medicare’s existing web of quality programs into one value-based performance program, according to a media release from the Senate Finance Committee.

The legislation incorporates a five-year 0.5 percent increase, which was part of a three-month temporary fix included in the bipartisan budget deal in December. That deal averted a 25 percent punch to physicians’ bottom line in January and gave lawmakers time to come to agreement.

A potential stumbling block, though, is that lawmakers still have not come up with a method to pay for it. With the 0.5 percent increase, the cost for the SGR repeal comes to about $125 billion over 10 years, according to the Congressional Budget Office.

“We must still wrestle with the difficult question of offsets and protecting the most vulnerable seniors from increased out-of-pocket costs,” said Rep. Henry Waxman (D-Calif.), ranking member of the committee, in a news release about the proposed legislation.

Despite the financial elephant-in-the-room, reception to the new legislation from physician representatives has largely been positive.

The American Medical Association called the proposed legislation a critical step. “Continuing the cycle of short-term patches by merely addressing the 2014 cut that is imminent on April 1 without solving the underlying problem would be fiscally irresponsible and further undermine the Medicare program,” said Ardis Dee Hoven, MD, AMA president, in a statement.

“…we commend Congress for working to fundamentally change the payment system for health care,” said Reid Blackwelder, MD, president of the American Academy of Family Physicians, in a statement. “Too much money has been wasted paying for duplicated, unnecessary care that does little to improve a patient’s outcome. By establishing alternative payment that supports comprehensive and coordinated care through models such as the patient-centered medical home, this legislation has paved a way for better care and less cost.”

While the lawmakers involved in putting forward the proposed SGR repeal have acknowledged there is much work left to do, the clock is ticking on the temporary fix put in place in the December budget deal. That reprieve expires March 31.

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