Former CMS chiefs introduce SGR repeal compromise

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Several former Medicare administrators have proposed a compromise on the sustainable growth rate (SGR) formula for Medicare payments. Their plan calls for a five-year suspension of the SGR rather than a permanent repeal, according to MedPageToday.

The proposal is a middle ground between permanent repeal and the short-term patches used in the past. It would suspend the SGR for five years, implementing the first half of the 10-year repeal legislation currently in Congress, according to the article. Repeals are considered permanent if they are funded for the next decade or longer.

The five-year plan would be less expensive for Congress to finance, cutting the price tag in half, according to Mark McClellan, M.D., Ph.D., former administrator of the Centers for Medicare & Medicaid Services (CMS). Despite widespread support for SGR repeal among industry groups, the cost of full repeal--pegged at about $175 billion in a report from the Congressional Budget Office--is seen as a major obstacle.

The five-year compromise would also give healthcare providers time to adjust to new payment models, like accountable care organizations, before they have no other options, and allow more time to streamline quality metrics, according to Gail Wilensky, Ph.D., who ran Medicare from 1990 to 1992.

"You could do the first steps of what all of the legislation does, which is provide a known piece of stability for several years and put in place some specific activities to try to move forward with performance metrics," Wilensky said Friday at an Alliance for Health Reform briefing, where the proposal was presented, according to the article. "In that five-year window, you could decide on the metrics that are appropriate going forward."

Legislation to repeal the SGR has circulated through both houses of Congress since last year. Both bills cleared the House Ways and Means Committee and the Senate Finance Committee, respectively, FierceHealthFinance previously reported.

To learn more:
- read the MedPageToday article

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