HomeWashington Letter2014 ▶ SGR Bill Introduced
SGR Bill Introduced

February 2014

A bipartisan/bicameral agreement has been reached on legislation to repeal and replace the Medicare sustainable growth rate factor.  The bill reconciles the 3 different versions of legislation that were being considered by the House Ways and Means Committee, House Energy and Commerce Committee and Senate Finance Committee.

While similar to the earlier proposals in creating a Medicare physician reimbursement system that move toward recognition and reimbursement for quality care, the bill does have important changes. The most notable change for the physician community is that the bill provides five years of 0.5% updates for physicians and other part be providers.  The bill also is reported to have a more generous quality reward system for providers.  Below is list of other key points of the legislation (courtesy of the AMA):

  • The SGR would be repealed immediately.
  • Positive annual payment updates of 0.5 percent would be provided for five years.
  • The VBP program has been replaced with a similar Merit-Based Incentive Payment System or MIPS, which includes prospectively-set performance thresholds and offers flexibility in the imposition of performance requirements that are inappropriate for some specialties.
  • The effective date of the MIPS program would be one year later than the original VBP proposal, and will start in 2018.
  • The MIPS funding pool was increased and is no longer budget neutral, and the phase-in of penalty risks for those who fall in the lowest performance quartile has been capped at a maximum of 9 percent (as opposed to the previous 12 percent).
  • The 5 percent added incentive payment for physicians in Alternative Payment Models was retained.
  • Funding for technical assistance to small practices of 15 or fewer professionals was doubled.
  • Provisions similar to the Standards of Care Protection Act are included.
  • Physicians who opt out of Medicare to engage in private contracting with their patients would no longer be required to renew their opt-out status every two years.

While introduction of a single unified bill is a major step forward, the legislation is silent on how to pay the estimated $ 130 billion over ten years price tag. Working with Congress to find a bipartisan $130 billion offset for the bill will be the next legislative milestone.

Last Reviewed: October 2017