After stating last month that his committee would take up
legislation replacing Medicare’s Sustainable Growth Rate formula (SGR), House
Energy and Commerce Committee Chairman Fred Upton (R-MI) has scheduled a meeting
on the matter. The Energy and Commerce Health Subcommittee has set a markup for
a new bill addressing the SGR for next Monday.
According to CQ, the
subcommittee markup will be the first in several years on a plan to repeal the SGR
and institute a new system for Medicare reimbursements to doctors. Upton confirmed the markup Monday in an interview.
The sustainable
growth rate, or SGR, was enacted by the Balanced Budget Act of 1997. The
formula is intended to ensure that the yearly increase in expense per Medicare
beneficiary doesn’t exceed the volume increase of the country’s gross domestic
product (GDP). Four factors are taken into account, including the estimated
percent change in fees for physicians’ services, the estimated percent change
in the average number of Medicare fee-for-service beneficiaries, the estimated
10-year average annual percentage change in real GDP per capita, and the
estimated percentage change in expenditures due to changes in laws or
regulations. According to ModernHealthcare,
the formula also includes a “clawback” mechanism that reduces Medicare fees if
overall spending targets were exceeded the previous year.
Each year, Congress passes a ‘patch’ or ‘doc fix’ to avoid the
cuts required by the SGR. This bill framework
would totally replace the current SGR with an enhanced fee-for-service system,
while allowing providers to opt out and participate in alternative payment
models. In the fee-for-service program, providers would get payment updates and
incentives based on how they met specified quality measurements.
The House Ways and Means Committee may also take
up possible fixes, as they have direct jurisdiction over a number of potential
payment offsets.
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