Schwartz and Heck Introduce Bipartisan Legislation to Repeal SGR and Reform Medicare Physician Payment System

Feb 6, 2013 Issues: Health Care, Seniors
Schwartz and Heck Introduce Bipartisan Legislation to Repeal SGR and Reform Medicare Physician Payment System

Washington, D.C. – U.S. Reps. Allyson Schwartz (D-PA) and Joe Heck, D.O. (R-NV) introduced the Medicare Physician Payment Innovation Act today to ensure patient access to physicians while promoting efficiency, quality and value in health care delivery. The bipartisan legislation permanently repeals the flawed Sustainable Growth Rate (SGR) formula and sets out a clear path toward comprehensive reforms of Medicare payment and delivery systems. This week, the Congressional Budget Office significantly lowered its estimate of the cost to permanently repeal the SGR from $245 billion to $138 billion.

Medicare payment policies have a direct impact on the care that beneficiaries receive and the sustainability of Medicare in the long term. For over a decade, the Sustainable Growth Rate (SGR) formula—which is used to determine payments for physicians’ services under Medicare—has threatened to impose steep cuts in Medicare payments for care provided to America’s seniors. These cuts threaten to drive physicians out of Medicare, creating severe access problems for our seniors and leading to uncertainty and instability for patients, health care providers, and the federal budget.

The Medicare Physician Payment Innovation Act puts in place vital delivery system and payment reforms to ensure long-term stability in the Medicare physician payment system and contains the rising growth in health care costs.  

“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,” said U.S. Rep. Schwartz (PA-13). “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.”

“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,” said U.S. Rep. Joe Heck (NV-03). “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. I thank Congresswoman Schwartz for joining with me to confront this issue and look forward to working to see this bill passed.”

Summary of the Medicare Physician Payment Innovation Act:

  • Permanently repeals the SGR formula
  • Provides annual positive payment updates for all physicians for four years
  • Ensures access to preventive care, care coordination, and primary care services through increased payment updates for those services
  • Aggressively tests and evaluates new payment and delivery models
  • Identifies a variety of unique payment models to provide options for providers across medical specialties, practice types, and geographic regions
  • Stabilizes payment rates for providers who demonstrate a commitment to quality and efficiency within a fee-for-service model
  • Ensures long-term stability in the Medicare physician payment system through predictable updates that accurately reflect the cost and value of providing health care services in coordinated care models

“Over the past decade, the repeated  threat of cuts to physician payments resulting from the SGR has brought chaos to the practice environment. It is difficult for physicians to keep their doors open, especially for our members in small or solo practices, with the constant threat of Medicare payments being cut by 25 percent or more,” said Charles Cutler, MD, FACP, Chair-elect, Board of Regents, American College of Physicians. “We enthusiastically support this legislation. It not only addresses the continued threat of the SGR formula, it also moves Medicare beyond a pure fee-for-service payment model toward new models that better align payment with value.”

“This bipartisan legislation would help deliver the real reform we need, moving us away from today’s fee-for-service system to higher-quality, lower-cost care.” –John Rother, President and CEO, National Coalition on Health Care, which represents more than 80 businesses, medical societies, unions, insurers, health care providers, consumers, and patients.

“This bill promises a meaningful approach to one of the most challenging problems in our health care system — how to ensure that elderly and disabled Americans have access to the care they need when they need it,” said Jeff Cain, MD, President, American Academy of Family Physicians. “By permanently repealing the sustainable growth rate formula, we end repeated threats to physicians’ ability to provide care for Medicare beneficiaries. Equally important, this bill paves the way for innovations such as the patient-centered medical home. In doing so, it moves toward a system that improves quality while it restrains the growth in costs. We need to make sure our patients can get the right care from the right health care professional at the right time.”

“The Premier Healthcare Alliance supports work to prevent the nearly 30 percent scheduled cut in physician payments and address the flawed Medicare sustainable growth rate (SGR) formula. The SGR is an enormous unfunded liability that each year threatens to cut physician reimbursement to levels that would devastate the healthcare system and hinder Medicare patients’ access to care,” said Blaire G. Childs, Senior Vice President, Premier Healthcare Alliance. “We believe that a long-term solution to the SGR can only be achieved by embracing delivery system and payment reforms. This approach recognizes the need to reward value over volume, and creates mechanisms that will greatly advance delivery system reforms that enhance patient satisfaction, quality, and outcomes.”