Will Congress Deliver the “Doc Fix”?

House approves bipartisan SGR repeal and replacement, but will the discord end?

After years of short-term patches, the news from Washington is that lawmakers appear close to ending the annual SGR cliffhanger. As this magazine went to press, the U.S. House had indeed resoundingly passed HR 2, the “SGR Repeal and Medicare Provider Payment Modernization Act of 2015,” in advance of the March 31 deadline.

The Senate was on track to take up the measure after Congress returns from a two-week recess, raising the possibility of prompt passage in mid-April. President Obama also expressed support for the idea of a “fix.”

But should physicians get their hopes up?

Congress created the fatally flawed SGR formula back in 1997 as a means to control health care spending. Whenever the cost of health care exceeds the GDP, the SGR kicks in with automatic pay cuts. Since 2003, lawmakers have applied 17 temporary pay patches to stop these reductions. This year’s threatened cuts come to 21%.

The Chicago Medical Society has made SGR repeal one of its highest legislative priorities. Over the years, our advocacy team in Washington has relentlessly pushed Medicare reform on several fronts, particularly the right of physicians to balance bill their patients and for appropriate funding of graduate medical education. As physician shortages loom, we have catapulted workforce expansion to the top of our advocacy agenda.

The HR 2 package repeals the SGR formula and ends the yearly threat of pay cuts to physicians. Costing $214 billion over the next ten years, the bill adds $141 billion to the federal deficit, according to Congressional Budget Office estimates. Roughly $70 billion would be paid for through higher premiums on wealthier Medicare beneficiaries, and reimbursement changes for hospitals and other providers.

The legislation also institutes a 0.5% payment increase for five years while Medicare shifts doctors to a value-based care system. Physicians would be required to receive at least 25% of their Medicare payments through Alternative Payment Models by 2019-2020.

Other HR 2 features include changes in federal policy on health information technology. For example, doctors who meet meaningful use requirements for EMRs would earn a bonus. HR 2 also would reward remote patient-monitoring and telehealth as clinical practice improvement activities. The bill extends the Children’s Health Insurance Program for two years. Senate democrats strongly favor a four-year extension of CHIP.

The federal CMS has said it can delay the 21% cuts for two weeks, holding claims for 10 business days.

SGR Reality

The SGR saga has been part of physicians’ lives for 18 years, with 17 pay patches since 2003. Members of Congress have always understood that failure to approve a patch, allowing pay cuts to take effect, would create catastrophic access to care problems for seniors when physicians could no longer afford to care for them. Lawmakers want to avoid accountability for such a scenario, and the prospect of not being re-elected to office.

Simply put, we should not rule out an 18th pay patch.