Congress Votes to Repeal Medicare SGR

by Ajai Raj

Source: Clinical Oncology News

The Senate voted Tuesday night to repeal the sustainable growth rate (SGR) formula for calculating healthcare provider reimbursements through Medicare, in a 92-8 decision that oncology associations are praising as historic and long overdue.

H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015, also garnered 392 votes in the House of Representatives, marking unprecedented bipartisan cooperation on an issue that has been a sore point for physicians for nearly two decades.

The SGR formula became the law in the Balanced Budget Act of 1997. In an attempt to control physician spending, the complex formula tied provider reimbursements to GDP. In practice, SGR resulted in unsustainable cuts to Medicare reimbursements, prompting Congress to pass short-term legislative fixes each year to stop the reductions mandated by the formula. These patches have cost Congress $170 billion since 2003.

Doing away with SGR, H.R. 2 “ensures a 5-year period of stable annual updates of 0.5 percent to transition to a new system,” one that will “[move] Medicare away from a volume-based system towards one that rewards value,” according to the sponsors of the bill.

Peter Paul Yu, MD, FACP, FASCO, the president of the American Society of Clinical Oncology, praised the vote as “courageous,” characterizing it as “a vote for the millions of patients with cancer who depend on Medicare to help them fight their disease.”

Not everyone is pleased with the vote. John Graham, a senior fellow at the National Center for Policy Analysis, a non-partisan think tank based in Dallas, acknowledged in a report that SGR is an ineffective formula for determining Medicare reimbursements, but criticized H.R. 2 as a “poor fix” that “would break the promise of fiscal responsibility made by both Republicans and Democrats and add $500 billion to the national debt over the next twenty years.”

However, Steven L. D’Amato, BSPharm, BCOP, the president of the Association of Community Cancer Centers, lauded the vote in a statement as “a long-awaited critical step in the right direction, restoring stability for physicians serving Medicare patients in communities across the country.”

The Obama administration has also expressed strong support for H.R. 2. A statement released last month by the Office of Management and Budget stated that the bill would “reform the flawed Medicare physician payment system to incentivize quality and value.”