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House Energy and Commerce Health Subcommittee Approves Repeal of SGR Formula

The Congressional Budget Office estimates the costs of maintaining physician Medicare reimbursement at current levels and preventing cuts to the sustainable growth rate (SGR) formula at $139 billion over the next 10 years.  Today, in an attempt to address that issue, the House Energy and Commerce Health Subcommittee approved legislation aimed at repealing the Medicare physician payment system that is presently in place.

The legislation proposes to replace the SGR formula with a payment system focused on quality of care measures and other new care models.  The proposed system would remain a fee-for-service system but would require providers to report quality measures.  The legislation also proposes that providers could opt out of a fee-for-service model by selecting to participate in a new care delivery model.  Under the proposed legislation, during each of the first five years, Physicians would receive a .5 percent increase.  Beginning in 2019, physicians could receive up to 1 percent increases based on their performance against quality measures.