House passes bill to repeal sustainable growth rate

By a vote of 392 to 37, the U.S. House of Representatives passed a bipartisan bill today that repeals the sustainable growth rate, a key factor in annual Medicare physician payment updates, and replaces it with a merit-based payment system.

Support for the bill was virtually even along party lines, with 212 Republicans and 180 Democrats voting for the measure.

The Senate is expected to vote on the measure tomorrow or after Congress’ 2-week spring recess.

The bill, introduced in the House and Senate on March 19, ensures a 0.5% annual physician payment update through 2019. The new payment structure takes effect in 2019.

On March 24, the American Medical Association and Military Officers Association of America called on Congress to repeal the SGR and preserve access to health care for military families and seniors, according to an AMA press release.

“As a physician who served in the military, I understand how important TRICARE is for service members and their families,” AMA President Robert M. Wah, MD, said in the release. “These Americans, who sacrifice so much for our country, deserve to have the security that they will be able to access care when they need it. It is time for policymakers to seize the moment to finally eliminate the SGR once and for all and put in place new policies that support the implementation of new delivery and payment models that will improve care.”

The SGR, adopted in 1997 to control physician spending, tied physician payment updates to the relationship between overall fee schedule spending and growth in the gross domestic product.

Since 2003, Congress has enacted a series of 17 short-term patches totaling almost $170 billion to forestall significant cuts in Medicare reimbursement. The most recent patch would have expired on March 21 if no action had been taken, resulting in a 21% cut in Medicare reimbursement.

The Merit-Based Incentive Payment System (MIPS) consolidates the three current Medicare incentive programs: Physician Quality Reporting System, Value-Based Payment Modifier and Meaningful Use of electronic health records.

The MIPS will assess performance in four areas: quality, resource use, EHR meaningful use and clinical practice improvement activities.

The bill offers financial incentives for providers to participate in tests of alternative payment models.

The bill also preserves and extends the Children’s Health Insurance Program through 2017. – by Matt Hasson

"We applaud the House of Representatives for passing legislation that eliminates the Sustainable Growth Rate formula and takes a giant leap toward meaningful and urgently needed Medicare physician payment reform. Cancer incidence among Medicare beneficiaries is expected to increase by 67 percent by 2030, and maintaining a fundamentally flawed payment system could compromise healthcare access for this growing patient population. The bill passed today goes a long way to restoring stability in one of cancer care's most vital programs. The American Society of Clinical Oncology (ASCO) now urges the U.S. Senate to follow the House's lead and pass the Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2) before it leaves for its Spring recess. This bill would finally eliminate the perennial threat and uncertainty that the SGR has created for oncology practices across the country. It would also put in place important incentives to encourage the delivery of high quality care, and provide resources to enable practices to move toward alternative payment models. Without such action by the Senate, physicians and Medicare beneficiaries will be back on a 13-year roller coaster that has included 17 short-term patches that have cost nearly $170 billion and caused tremendous uncertainty in oncology practices. ASCO urges the Senate to act on this unprecedented momentum to replace a dangerously inadequate Medicare reimbursement system with a more rational and reliable one."

– Allen S. Lichter, MD, FASCO, CEO of ASCO

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“The American Society of Hematology (ASH), the world's largest professional society concerned with the causes and treatment of blood disorders, applauds the bipartisan passage of this legislation. ASH remains hopeful that the Senate will also pass this bill repealing the SGR by March 31 to avoid a more than 20 percent reduction in Medicare physician payment rates. ASH has been a leading advocate urging Congress to repeal the SGR and replace it with a payment system that fully and realistically accounts for the costs of operating a medical practice. Since 2002, the SGR formula has annually called for reductions in payments for physician services. While Congress postponed scheduled reductions in the past, this has only provided temporary reprieve, creating an atmosphere of instability that has been highly disruptive to hematology practices. ASH supports the five-year period of stability included in this agreement. ASH is pleased that members of the House of Representatives have supported this legislation that presents real, structural changes to the Medicare program and charts a course toward greater value and sustainability. We urge the Senate to act swiftly to pass this bill before the March 31 deadline."

– David A. Williams, MD, president of ASH

“The American Academy of Orthopaedic Surgeons (AAOS) strongly applauds the House for passing a permanent repeal and replacement of the flawed SGR formula. The SGR has plagued the health care industry for over a decade, and short-term patches have been harmful to the economy and to Medicare patients seeking access to specialties they need. On behalf of the more than 38,000 AAOS members, we appreciate the tremendous effort leadership and committees have put into SGR reform and urge the Senate to pass the legislation before the expiration of the current patch. Permanently repealing the payment formula is the only fiscally responsible way toward a higher performing Medicare program.”

– Frederick M. Azar, MS, president of the AAOS

“A permanent fix of the SGR formula is essential in ensuring Medicare’s solvency and improving care delivery. We thank Congress for the hard work and continued dedication to finding a viable solution to the flawed formula.”

– Thomas C. Barber, MD, chair of the AAOS Council on Advocacy

“We support this long-overdue reform of the Medicare payment formula and elimination of the SGR. The physician payment system needs to be stabilized for the sake of our patients and for our physicians who care for them.”

– Paul Summergrad, MD, president of the American Psychiatric Association

“APA strongly supports the bipartisan legislation the House passed and will continue to partner with the AMA and the other medical societies to urge all Senators to vote yes to send the bill to President Obama, who has already said he would sign it.”

Saul Levin, MD, MPA, CEO and medical director of the American Psychiatric Association

"This is certainly a pivotal moment for medicine. What is transpiring right now are the results of over a decade of extraordinary advocacy efforts by the Academy, its members, and other physician groups. Repealing the SGR would provide the stability of annual increases in reimbursements and preserves a value-based, fee-for-service system. While not a perfect bill, repealing the SGR would allow physicians to move forward and focus on other unresolved issues under a value-based performance system, such as how to measure quality performance appropriately and meaningfully use electronic health records. The Academy's IRIS(tm) Registry offers a unique tool to help solve these issues. The Academy stands with medicine in urging the Senate to quickly pass legislation that would permanently repeal the SGR. We have never had a more opportune time to improve the Medicare physician payment system."

– David W. Parke II, MD, CEO of the American Academy of Ophthalmology

"The AAFP applauds the House for its action and calls on the Senate to pass MACRA as soon as possible. While not a perfect solution to health care delivery reform, MACRA resolves some of our health care system's most pressing issues. It reinforces reliable access to better, more efficient care for elderly and disabled patients, and it preserves health coverage for our most vulnerable children."

– Robert Wergin, MD, president of the American Academy of Family Physicians

“The House vote reflects the fact that never before has there been such broad and bipartisan support within and outside of Congress for policies to repeal the Medicare SGR formula and to create a better payment system for physician services provided to patients enrolled in Medicare. The vote reflects the fact that never before has such a bill received the support from so many stakeholders across the health care system: hospitals, nursing homes, consumer advocacy organizations, unions, payers, and over 750 physician membership organizations, national and state.”

– David A. Fleming, MD, MA, MACP, president of the American College of Physicians