House introduces bill to fix Medicare cuts for good

The House yesterday introduced bipartisan legislation to permanently repeal the sustainable growth rate formula. The bill follows new data from the Congressional Budget Office this week that significantly lowers the estimates of how much it will cost to repeal the SGR.

The Medicare Physician Payment Innovation Act, sponsored by Reps. Allyson Schwartz (D-Pa.) and Joe Heck (R-Nev.), calls for a permanent fix to yearly automatic cuts to Medicare.

The CBO originally estimated a permanent repeal to cost $245 billion, but the nonpartisan agency now says it will be $138 billion. The downgraded projections could pave the way to a long-term solution to Medicare payment reform.

"I think the new CBO number bodes well for passing the legislation; it's a much smaller hill to overcome," said Heck, a physician, Politico reported.

The American College of Physicians and the American Academy of Family Physicians back the bill, saying it would end the constant threat of reduced payments to physicians and care for Medicare beneficiaries.

The American Medical Association, although it did not outright support the bill, said, "This legislation is an important part of the continuing discussion on the future of Medicare and the end of the SGR."

The problem of the SGR is based on a decades-old approach to control healthcare spending with automatic across-the-board cuts.

"There is no single greater threat to the long-term solvency of Medicare and seniors access to healthcare than the broken Medicare payment system, or SGR," Heck said yesterday in a statement.

Although Congress averted the 27 percent cuts in the New Year, it's had a history of repeated last-minute delays and short-term doc fixes. The cost of continuous stop-gap measures add up to much more than the cost of a permanent solution, The Hill's HealthWatch noted.

The bill is almost identical to the Schwartz-Heck plan last year, except for one key piece of the original plan that is left out--that unused funds from the Iraq and Afghanistan wars would finance repealing the SGR, Politico reported. This time, the bill leaves the question of funding up to lawmakers.

It does, however, call for yearly increased payment updates for physicians over the next four years, increased payments to primary care and new payment methods that physicians can choose from.

It's unclear how far the legislation will actually get, according to Politico, but Schwartz said she is working with Ways and Means to pass the legislation this year.

If Congress does not pass a permanent repeal, automatic 25 percent cuts to Medicare physician payments will set in.

For more information:
- check out the Medicare Physician Payment Innovation Act (.pdf)
- see the statement from Schwartz's office
- here's the AMA statement
- read the Hill's HealthWatch article
- read the Politico article

Related Articles:
Obama urges sequestration fix to avert Medicare cuts
New Congress renews efforts to repeal SGR
MedPAC pushes SGR repeal, but few pay changes
Fiscal cliff law shifts Medicare cuts to hospitals
Congress approves last-minute 'doc fix'
Hospitals cheer, jeer fiscal cliff deal
Fiscal cliff countdown: Medicare payments in real danger