Another Attempt at SGR Repeal in the 113th Congress……..

Posted by Dorkina Myrick, M.D., Ph.D.

Compensation for physician services has been a problematic issue for several years, and the issue is not expected to disappear at any time in the near future. One legislative issue that directly impacts physician payment is the Medicare Sustainable Growth Rate (SGR).  Yesterday, Congressional Representatives Allyson Schwartz and Joe Heck introduced bipartisan legislation to repeal the SGR and reform the Medicare Physician Payment System. (1-4)

Several factors complicate SGR-guided Medicare expenditures for physician services and limit its usefulness.  These factors include: 1) increases or decreases in the percentage of people enrolled in the Medicare program, 2) revisions of the law or in regulations that directly result in modification of spending for physician services, 3) adjustments in physician service costs, and 4) changes in the per capita gross domestic product (GDP). (1-8)

As a temporary solution for this problem, instead of reducing reimbursements as recommended by the SGR formula, Congress has maintained relatively steady levels of reimbursement on an annual basis by periodically enacting legislation to modify SGR recalibration.  This annual revision of the SGR has become colloquially known as the “doc fix.” (1, 5-9)

Reimbursements to physicians for health care services rendered are reduced if Medicare spending eclipses recommended levels as per the SGR.  Numerous proposals for solving the SGR have been introduced in Congress, but none have been successful, thus far.  One of the latest is H.R. 5707, the “Medicare Physician Payment Innovation Act,”  introduced in the 112th Congress.  Provisions of H.R. 5707 include repeal of the SGR, physician payment updates for primary care services, a greater focus on payment stabilization incentives for physicians who deliver high-value, high quality patient care, assessment of new payment and delivery models, and diversity of payment models across various medical specialties and practice types. (10, 11)

The 113th Congress began with a renewed resolve by lawmakers on the House Ways and Means and Energy and Commerce committees to address the SGR problem with another attempt at passing effective legislation to eliminate the problem.  (12)  Yesterday, Congressional Representatives Allyson Schwartz and Joe Heck introduced bipartisan legislation to repeal the SGR and reform the Medicare Physician Payment System.  This legislation was initially introduced as H.R. 5707 in the 112th Congress in May 2012. (4, 10, 13)

Stated Representative Schwartz: “For over a decade, this policy has failed taxpayers, Medicare beneficiaries and those on the frontlines of patient care. The framework for this legislation has garnered broad bipartisan support over the past year.  I look forward to working with Representative Heck and my Republican and Democratic colleagues on the Ways & Means Committee to pass legislation this year that fully repeals the SGR and moves us toward our shared goals of rewarding quality, providing better integration and coordination of care, and ensuring seniors get the care they need when they need it. There is no excuse for further inaction.” (4)

Representative Joe Heck echoed these sentiments:  “There is no single greater threat to the long-term solvency of Medicare and seniors access to health care than the broken Medicare payment system, or SGR. Each year, health care practitioners are faced with devastating cuts that could make it nearly impossible for them to continue providing care for Medicare beneficiaries. And each year Congress has avoided coming up with a serious solution to this problem.  This bill is that solution.  Our seniors and their health care providers deserve a program that is immune to congressional dysfunction and that would provide stability by replacing the currently flawed formula with a system that promotes efficient, cost-effective health care.” (4)

Physicians are hopeful a lasting solution will be achieved.

1.       Clemens, M. Kent.  “Estimated Sustainable Growth Rate and Conversion Factor, for  Medicare Payments to Physicians in 2013.” Office of the Actuary.  Center for Medicare  and Medicaid Services. March 2012. 1-9.  Print.
2.       Hsiao, William C., Braun, Peter, Yntema, Douwe, and Becker, Edmund R.. “Estimating   Physicians’ Work for a Resource-Based Relative-Value Scale.”  New England Journal   of Medicine. 1988.  319:835-841.  Print. Web. 3 November 2012.  <>
3.     “Medicare’s Payments to Physicians: The Budgetary Impact of Alternative Policies   Relative to CBO’s March 2012 Baseline.” Congressional Budget Office.  Print.  30 July  2012.  (Updated 1 November 2012) Web.  9 December 2012. <>
4.       “Schwartz and Heck Introduce Bipartisan Legislation to Repeal SGR and Reform Medicare Physician Payment System.”  Representative Allyson Schwartz Website.
5.      “Review of CMS’s preliminary estimate of the 2013 update for physician and other   professional services.” MedPAC-Report to the Congress: Medicare and the Health Care     Delivery System. Appendix A.  June 2012. Print. Web. 12 December 2012.   <>
6.         Van de Water, Paul N.  “The Sustainable Growth Rate Formula and Health Reform.”  Center on Budget and Policy Priorities.  21 April 2010:1-2. Print.  Web. 27 October 2012. <>
7.        Carey, Mary Agnes.  “FAQ: The ‘Doc Fix’ Dilemma.”  Kaiser Health News.  Kaiser  Family Foundation. 17 February 2012.  Web. 21 October 2012. < doc-fix.aspx>
8.        “A Real ‘Doc Fix’.” Editorial.  The New York Times. ed. 21 February 2012.  A22. Print.   Web.  21 October 2012.  < ix.html?_r=0> 
9.       Aizenman, N.C. “Medicare’s ‘SGR’ Formula Has Snowballed to Budget-Busting Juggernaut.” The Washington Post. 15 December 2011.  Web. 21 October 2012.           < snowballed-to-budget-busting juggernaut/2011/12/13/gIQAXaq3wO_story.html >
10.       Schwartz, Allyson Y. (PA-13).  “H.R. 5707-Medicare Physician Payment Innovation Act  of 2012.”  Bill Summary and Status, All Information.  112th Congress (2011-2012).   Thomas. 9 May 2012.   Web. 19 October 2012.  <>
11.         Myrick, Dorkina. “A Permanent Cure for the “Doc Fix”? Analysis of H.R. 5707. The Medicare Physician Payment Innovation Act of 2012 .” Abstract/Poster Presentation for the American College of Legal Medicine (ACLM).  February 2013.
12.        Pittman, David.  “Bill Near to Repeal SGR?” MedPage Today. February 7, 2013.  Website.
13.         Schwartz, Allyson Y. (PA-13).  “H.R. 5707-Medicare Physician Payment Innovation Act  of 2012.” Open Congress Website.


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