Bipartisan SGR replacement bill introduced by congressional leaders

House and Senate negotiators have reached a 5-year deal to provide physicians with a 0.5% annual increase in Medicare reimbursements, according to an announcement by congressional leaders on a deal to repeal the sustainable growth rate formula.

The bill does not detail how to pay for the reforms and still needs approval by both House and Senate, but it moves the process to a point where the funding specifics can now be debated on the basis of an agreed-upon change to the existing sustained growth rate formula (SGR) that most lawmakers agreed had to be part of a legislative “doc fix.”

Max Baucus

“Congress has spent a decade lurching from one ‘doc fix’ to the next,” Senate Finance Committee Chairman Max Baucus, D-Mont., said in the online statement. “Our bill makes Medicare’s physician payments more modern and efficient, and it will protect seniors’ access to their doctors.”

Rep. Henry A. Waxman, D-Calif., House Energy and Commerce Committee Ranking Member, said “difficult questions” remain, but “I am pleased we were able to reach a bipartisan agreement that replaces the current [formula] with a quality and value-driven approach.”

The American Medical Association quickly congratulated lawmakers on the deal.

Ardis Dee Hoven

"Throughout the legislative process, the bill authors have been receptive to AMA's recommendations to improve the policy," AMA President Ardis Dee Hoven, MD, said in a statement. But Hoven also pointed out that Congress now faces a March 31 deadline, when the current SGR formula calls for a 24% cut to physician payments.

The bill's other primary features include:

Improving the fee-for-service system by streamlining Medicare's existing web of quality programs into one value-based performance program that increases payment accuracy and encourages physicians to adopt proven practices.
Incentivizing movement to alternative payment models to encourage doctors and providers to focus more on coordination and prevention.
Making Medicare more transparent by giving patients more access to information and supplying doctors with data they can use to improve care.