SGR Update

February 16, 2012 – Yesterday, House and Senate negotiators reached a temporary agreement on freezing the current SGR rate for 10 months, avoiding the 27.4% cut in Medicare reimbursement scheduled for March 1, 2012.  
 
The 20-member bipartisan House-Senate conference committee has been meeting for the past month to come to an agreement on the SGR rate along with a payroll tax extension and an extension of unemployment benefits, also due to expire on March 1.
 
It is reported that the cost of freezing the current SGR will be nearly $20 billion dollars.  Part of the cost will be offset through reductions in a number of health care programs including;

More than half of the fix will be paid for by cutting pieces of the healthcare reform law including;

• Cutting $5 billion from a $15 billion fund earmarked for preventive medicine services
• Cutting $4 billion in Medicaid disproportionate share hospital (DSH) payments, which are meant to compensate teaching hospitals

The agreement would continue to extend:

• Ambulance add-on payments
• The floor on geographic adjustments to the physician work component of the Medicare physician fee schedule
• The therapy cap exceptions process

If there is enough support in both chambers to finalize the plan, Congress is expected to approve the package by tomorrow before the President’s Day week-long recess. The bill would then be sent to the President for his signature. 

Although physician organizations approve the extension of the current SGR rate, many have commented that Congress is only approving another patch without a plan to permanently replace the SGR Medicare payment formula.

Tags: SGR and Medicare Fee Schedule