Wednesday, April 15, 2015

SGR Finally Repealed in Historic Senate Vote

Congress repealed the sustainable growth rate (SGR) component of the Medicare payment formula last night when the U.S. Senate voted 92-8 to approve the Medicare Access and CHIP Reauthorization Act. The legislation, which was approved by the House of Representatives two weeks ago, will now go to President Obama, who has already indicated he will sign it.

The new law permanently repeals the flawed SGR reimbursement formula, after more than a decade of efforts by APA, the AMA, and other physician groups. Without action, physicians would have faced a 21 percent across-the-board payment cut beginning April 15.

The SGR is a budget cap that was passed into law in 1997 as an attempt to control federal spending on physician services. Since 2003, Congress has routinely delayed devastating cuts that would have jeopardized beneficiary access to psychiatric services in the Medicare program through “patches” to scheduled SGR reductions, causing significant instability and administrative burden for physician practices.

The new law will provide a stable period of annual updates of 0.5 percent now through 2019. The 2019 rate is maintained through 2025, with the potential for additional adjustments through the creation of the new Merit-Based Incentive Payment System. Beginning in 2019 and ending in 2024, physicians may instead make themselves eligible for a 5 percent incentive payment based on participation in certain alternative payment models (APMs). In 2026, physicians who participate in these APMs will receive a 1 percent annual update, while all other physicians will receive a .5 percent annual update. The law also reauthorizes the Children’s Health Insurance Program for two years.

“Senate passage of the SGR reform bill is a major step toward a reliable and rational payment system for Medicare beneficiaries and their physicians. It is long overdue,” said APA President Paul Summergrad, M.D. “APA, our members, and the entire medical community advocated strongly for this legislation, which will eliminate uncertainty from the Medicare system to make sure patients and families can get the care they need and deserve from their physicians.”

“Repealing the SGR has been a decades-long process that has involved the advocacy of thousands of APA members and other medical experts--a grassroots effort that will truly benefit both patients and physicians,” said APA CEO and Medical Director Saul Levin, M.D., M.P.A. “I commend the President and Congress for their leadership and efforts in this process.”

Look to Psychiatric News for full coverage of the new law. A summary of the legislation is posted on APA’s website.

(Image: Allison Hancock/