Postponing SGR cuts will cost $271B

Every year since 2003, Congress has been overriding payment rates under Medicare's sustainable growth rate (SGR) formula. However, repealing or continuing to override the pay cuts scheduled to hit providers under SGR come with a multimillion-dollar price tag, according to new data from the Congressional Budget Office (CBO).

Blocking the cuts and maintaining current payment rates from now through 2022 would cost an additional $271 billion. Meanwhile, resetting payments to 2011 levels and increasing them annually at 1 percent or 2 percent, plus the growth in gross domestic product, would cost an additional $314.1 billion or $376.6 billion, respectively, noted the nonpartisan CBO.

With a 30 percent Medicare pay cut scheduled to hit providers in 2013, such costs could affect how Congress acts on the matter later this fall.

However, providers shouldn't worry about dramatic changes to payment rates any time soon, as the industry still can't agree on how to replace the SGR formula, MedPage Today reported.

"What is the solution anyone has proposed?" Health Policy and Strategy Associates President Robert Laszewski told MedPage Today. "There are no fixes on the horizon."

Back in May, the House proposed a solution that would permanently repeal the SGR, preventing the pay cut in 2013 and would phase out fee-for-service payments. Provider groups quickly praised the plan to repeal and replace SGR.

For more:
- check out the CBO data (.pdf)
- read the MedPage article


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