After Delay, Senate Approves SGR Repeal

It took 2 extra weeks and a late-night session, but the US Senate on Tuesday overwhelmingly approved a repeal of the Sustainable Growth Rate (SGR) formula that has frustrated Medicare providers for more than a decade.

The bill, which will head off a 21% pay cut for physicians services scheduled to take effect this month, now heads to President Barack Obama’s desk, where it is expected to receive a swift signature. Health care providers and organizations have been united behind the bill, which they hope will be the long-term solution to Medicare funding. The SGR has been the subject of 17 short-term fixes since it was passed in 1997.

“Passage of this historic legislation finally brings to an end an era of uncertainty for Medicare beneficiaries and their physicians — facilitating the implementation and innovative care models that will improve care quality and lower costs,” said James L. Madara, MD, CEO and executive vice president of the American Medical Association. “Patients will be able to get the care they need and deserve.”

The new legislation, dubbed the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)

was passed by the House late last month, but the Senate took its Easter/Passover recess without voting on it. The bill aims to put Medicare’s payment emphasis on quality and value, rather than the traditional fee-for-service approach. It also includes a 0.5% pay increase in each of the next 5 years. About 2% of Medicare recipients — those making more than $135,000 per year – will pay higher premiums beginning in 2018 to help offset the cost.

The legislation also includes a 2-year extension of the Children’s Health Insurance Program.

While the bill ended up receiving broad bipartisan support, its passage remained in question for much of the day. Six amendments were put forth offering changes to the bill. Passage of any one of those amendments would have required the bill to be sent back to the US House of Representatives, a move that would add days or weeks to the timeline for enactment of the bill.

Though the idea of repealing the SGR enjoyed broad support, its price tag proved controversial. A group of Senate Republicans, led by Alabama Sen. Jeff Sessions, said the bill shouldn’t move forward because it would add to the national debt. The Congressional Budget Office estimates the bill will increase the deficit by $141 billion by 2025.

In a speech prior to the bill’s passage, Sessions said he approves of the legislation generally, but believes it shouldn’t be enacted unless it’s fully funded

“Too often a bill that’s not sound financially is moved at the very last minute and members are told if you don’t pass it now something bad’s gonna happen,” he said.

He said Congress should instead pass another temporary fix and bring the more comprehensive legislation back only once funding had been identified.

The “pay-as-you-go” amendment filed failed 58-42, and most of the Republicans who supported the amendment ultimately voted for the bill.

The prevailing view appeared to be that voiced by Sen. Ron Wyden, (D-Oregon), who called the bill a “milestone.”

“That milestone is abolishing once and for all the outdated, inefficiency-rewarding, common-sense-defying system of paying physicians under the Medicare program,” he said.

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