Thursday, May 30, 2013

One Small Step Closer to Abolishing the SGR Formula

The much-maligned formula by which the government determines what physicians will be paid for treating Medicare beneficiaries inched closer to being replaced Tuesday when Republicans on two House committees released more details of a framework that could replace the sustainable growth rate (SGR) formula over the next few years. Almost every year, the formula calls for substantial cuts in physicians' Medicare reimbursement, and just as often, Congress votes to postpone the reductions, compounding the size of future cuts. The latest estimate is $140 billion.

GOP members of the Energy and Commerce Committee and Ways and Means Committee, both of which have jurisdiction over key health care issues, are seeking additional feedback from medical organizations, including APA, and other stakeholders on a proposal that would replace the current system in which doctors are paid per procedure with one based largely on incentives that would determine fees on how well they perform vis-à-vis certain criteria. Until such a system is in place, however, the proposal calls for a transitional period in which rates per procedure are specified and stable for a period of time while the government develops a new system based on quality of care provided. Momentum seems to be building for taking some action on the SGR formula this year. APA will respond to the committees' request for feedback before a hearing is held on June 5 and has already provided feedback on an earlier draft of the proposal.

Commenting on the latest iteration of the Medicare reform framework, Matt Sturm, an assistant director in APA's Department of Government Relations, told Psychiatric News, that, "While many key details of the SGR repeal and replacement have yet to be fleshed out and disseminated by the committees, APA is encourage by the priority they have given to this important issue and the substantive work they've undertaken so far."

Read more about the SGR proposal and an April letter from APA Medical Director James H. Scully Jr., M.D., responding to it, in Psychiatric News.

(image: billdayone/


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