13-February-2014

A bipartisan coalition in the House and Senate have established a bill called the "SGR Repeal and Medicare Provider Payment Modernization Act of 2014." The bill would repeal the sustainable growth rate (SGR) formula, which is used to determine Medicare reimbursement rates for physicians. The agreement would set in place a five-year period of stability in the Medicare payment system, with a 0.5 percent annual pay rate hike for doctors. The final five years of the plan would usher in a series of reforms aiming to push Medicare physician reimbursement to a value-based model.

Nick Manetto, director at FaegreBD Consulting, told HealthLeaders Media that lawmakers would be wise to act swiftly on the deal, as the March 31 deadline for action approaches. "They need to move or they will face another short-term patch, Manetto said. "The more time that goes on, the less likely this is to get done. The next step is to get this expedited, especially the offsets."

Unless the legislation to repeal SGR is enacted by March 31, it's estimated that Medicare reimbursement rates will drop by 24 percent.

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