Senate Finance chair renews call for permanent SGR Fix

Senator Ron Wyden (D-Ore.) used his opening remarks in a hearing on health and human services spending in the president’s Fiscal Year 2015 budget to continue to urge a permanent repeal for the sustainable growth rate (SGR) formula used to calculate Medicare physician payments.

Senator Wyden is the primary sponsor of the Senate plan to repeal the SGR formula — “S. 2157: Commonsense Medicare SGR Repeal and Beneficiary Access Improvement Act of 2014.” This is the bill endorsed by the American Medical Association (AMA) as it includes a modest conversion factor update of 0.5 percent until 2018, followed by a period of temporary payment stability (0 percent increases) and then transitions to payment increases tied to physician participation in alternative payment systems that reward providers who meet certain as-yet-to-be-determined quality-of-care metrics.

What it critically did not have in time for passage ahead of when the last SGR fix ran out on April 1 was a funding source both parties could agree on. Senate Democrats would not accept the proposal in the House-passed SGR repeal bill (H.R. 4015: SGR Repeal and Medicare Provider Payment Modernization Act of 2014) to pay for the cost of replacing the SGR formula by delaying the Affordable Care Act’s individual mandate. Likewise, the Democrats’ idea to pay for the repeal using the military Overseas Contingency Fund was unworkable for House Republicans.

“Congress has made real progress on permanently repealing and replacing the broken and dysfunctional Medicare physician payment formula,” Senator Hatch said in his opening statement before turning to the testimony by U.S. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius. “The reforms agreed to would push Medicare to be driven by the quality and value of care. Today’s volume-driven care isn’t good for seniors, their doctors or Medicare itself. The President’s budget  proposal  endorses the  bipartisan, bicameral  reform package, and I work forward to working with  Secretary Sebelius  to help push this over the finish line by year’s end.

S. 2157 is still alive in political terms and could be brought up for a vote before the end of the year if a workable solution on how to pay for the SGR repeal can be found and added to the bill. The House bill (H.R. 4015) may ultimately die in the Senate by not being brought up for a vote ahead of the end of this session of Congress.

However, the most likely scenario is that new SGR repeal and replace bills will be introduced and voted on early in 2015 as the current SGR patch does not expire until April 2015 and there is little incentive for lawmakers to tackle this thorny issue earlier than they absolutely have to.