AMA Drops Support For Permanent SGR Fix that Delays Individual Mandate

The American Medical Association (AMA) on Thursday took the unusual step of writing to Congress to express its disappointment in the current proposal to pay for a permanent repeal of the sustainable growth rate (SGR) formula by delaying the Affordable Care Act’s mandate that individuals must purchase insurance or pay a penalty for five years.

The following day, the House voted 238-181 to pass the SGR repeal with the individual mandate delay, setting the bill (H.R. 4015) up for almost certain defeat in the Senate. A total of 12 Democrats broke ranks with their party and voted for the bill.

In the letter to the House leadership — John Boehner (R-Ohio), the speaker, and Nancy Pelosi (D-Calif.), the minority leader — and all House members, James L. Madara, M.D., the AMA Executive President and CEO, said that the AMA believes the effort to permanently repeal the SGR has become “a victim of partisan approaches to resolve budgetary issues.”

He noted that the AMA continued to support the physician payment and delivery system reform contained in the SGR repeal bill (H.R. 4015/S. 2000), and reminded legislators that short-term remedies (aka, SGR temporary patches) are no longer acceptable.

Since last week when the GOP House leadership first proposed delaying the individual mandate by five years to pay for the SGR repeal, President Obama has promised that he will veto any such bill that makes it to his desk. According to a Congressional Budget Office analysis of the SGR repeal with the 5-year individual mandate delay, it would likely lead to millions foregoing insurance and higher costs for those who do sign up — in other words, a real poison pill for the president’s signature piece of legislation.

Meanwhile, powerful GOP Senators Mitch McConnell (R-Ky.), John Cornyn (R-Tex.) and Orrin Hatch (R-Utah) have introduced their own SGR replacement bill in the Senate that repeals the individual mandate completely. It is rival legislation to the SGR repeal and physician payment reform bill that Senate Majority Leader Harry Reid (D-Nev.) is seeking to bring up for a vote. The Sen. Reid version of the SGR repeal does not have a “pay-for” included in the bill.

Because of these developments, leading figures in the effort to repeal the SGR formula have begun saying publicly that the repeal is increasingly unlikely to happen this year. Instead, another temporary patch will be passed, most likely expiring sometime after the mid-term elections.

For example, Senator Orrin Hatch told Politico’s Pulse blog that unless Democrats give up on passing the SGR repeal without a way to fund it, Congress will “have to patch it.” He also reportedly said that by the time the patch expires, Republicans may have the majorities they need to pass an SGR repeal with the budget cuts they want. “If the Republicans take control of both houses, we will find the money," he promised Politico.

Another patch would certainly be bad news for the AMA. Repealing the SGR formula has been the a top legislative agenda for the Association for more than a decade, and 2014 presented one of the best shots it has ever had at a permanent repeal because the slower than anticipated growth in Medicare spending led the CBO to revise the cost of a permanent repeal downward.

This article was updated at 2:25 p.m. EST on March 14, 2013, to include the House vote on H.R. 4015.