Cost for proposed SGR repeal now at more than $180B

A last minute insertion in a bill to repeal the much-hated Medicare sustainable growth rate (SGR) formula increases the cost of the measure by more than $42 billion, according to a new Congressional Budget Office (CBO) report.

The CBO now estimates it will cost more than $180 billion over the next 10 years to repeal the SGR--$5 billion more than projected only six months ago and $42 billion more than estimated earlier this month.

The CBO released the analysis days after the House passed a bill in a 238-181 vote that repeals SGR and replaces the fee-for-service model with quality-based rewards. The Senate is supposed to vote on the bill next week, but industry experts aren't sure of the bill's future because Republicans inserted language that delays the Affordable Care Act's mandate requiring all individuals obtain health insurance.

The CBO estimates that the delay would add 13 million more uninsured Americans to the uninsured rolls by 2018.

The latest hitch is only one of many obstacles physicians faced since the government introduced the formula in the 1990s. It has only been deployed a single year, with Congress authorizing annual "fixes" in its place. Under the new agreement, physicians would receive payment bumps of 0.5 percent over the next five years.

Doctors are fed up over the most recent hiccup because in February it appeared both parties worked out an agreement to repeal the payment system.

"Just last month, both parties worked in a bicameral process to develop good-faith consensus and were historically close to repealing the dysfunctional payment system and improving healthcare for America's senior citizens, AMA President Ardis Dee Hoven said in a statement last week, FierceHealthcare previously reported. "It would be a shame for lawmakers to have done all of that hard work only to have it overcome by partisan politics over budgetary issues."

If lawmakers can't reach a compromise, it's likely that once again Congress will have to resort to its annual "fix," which means a 24 percent reimbursement cut as of April 1.

To learn more:
- here's the CBO report (.pdf)

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