In a late-year burst of bipartisan kumbaya, key House and Senate Committees have advanced legislation that would repeal the Sustainable Growth Rate or SGR formula Medicare uses to determine physician payment levels with a new system that seeks to drive payments for value rather than volume. The SGR, established in the last 1990s, has long been a bane to providers and senior advocates who have for years pushed Congress to override scheduled pay reductions. Those overrides have steadily added to the cost of a full repeal.
On Thursday, the House Ways & Means and Senate Finance Committees both approved similar versions of legislation to permanently address the SGR. The two panels developed their legislation in concert with little divergence until the eve of markup. These actions follow passage of similar legislation by the House Energy & Commerce Committee, another panel with jurisdiction over the matter, during the summer.
These committee votes came just a few days after the Congressional Budget Office (CBO) issued an updated estimate that further reduced the cost of the permanent fix. Once pegged just shy of $300 billion, the most recent estimate came in around $116 billion, adding additional fuel to the push for a permanent repeal. That figure, however, does not reflect provisions in all of the bills to provide modest annual bumps to all providers or a subset of providers during a transition period, and other policies.
While reconciling three bills into one is never easy, differences between the three are seen as relatively modest and bridgeable, and influential provider stakeholders remain deeply committed to a permanent repeal. But perhaps the biggest remaining challenge will be paying for the fix.
None of the three panels has released offsets of specific cuts that would be used to pay for the repeal. Finance Chairman Max Baucus had pledged that offsets would be unveiled before a markup, but leaders have yet to release them. With Congress heading for a multi-week recess, that’s a smart move since naming offsets would give opponents weeks to marshal opposition.
Because a short-term 3-month fix is in the works, lawmakers will have the first couple of months of 2014 to reconcile differences between the legislation, determine offsets, and move one bill through both chambers. If the pre-holiday spirit of bipartisanship continues into the new year and provider lobbyists remain united behind the cause, the long-desired death of the SGR may become a reality. But in a volatile climate and key mid-term election year, stakeholders can take nothing for granted.