SGR Update
May 12, 2011 – It appears Congress is attempting to not wait until the last minute to discuss the SGR payment formula this year. The House Energy and Commerce Committee (CEC) sent a letter to 51 medical organizations on March 28 for ideas on how to reform Medicare’s payment formula, stating they want to fix the payment formula permanently. (The CEC was the organization that delayed the 25 percent cut scheduled to take place on January 1, 2011.)   The letter was a pre-cursor to obtain alternative payment proposals for a CEC committee hearing on the SGR payment formula scheduled for May 5th.
Several medical organizations submitted letters to the CEC and all were in agreement to eliminate or drastically reduce the role of the fee-for-service model.
The hearing was held on May 5th with a panel of seven witnesses, five of which were physicians, testifying before the sub-committee. The hearing resulted in both Democrats and Republicans agreeing that the SGR must be replaced with a formula that is reasonable and can be updated with changing economics. The panel told the sub-committee it would like to see the SGR scrapped and payments held steady for five years while various new payment models are tested, including accountable care organizations.Â
If Congress is unable to come to an agreement on how to replace or fix the SGR formula or agree to another temporary waiver of the policy, physician fee schedule payments are expected to be cut by nearly 30% on January 1, 2012.
Congress has 10 business days from May 5th to submit their additional questions to the panel members before moving to the next step.
