SGR Fix Could Add $140 Billion to Federal Deficit

For the last 17 years Congress has passed temporary 1-year fixes to prevent the Sustainable Growth Rate (SGR) from enacting steep cuts to Medicare payments. This year, Congress is again flirting with the possibility of creating a permanent fix.

This year, cuts to physician payments would be 21%. Last year, Congress almost came close to fixing the problem, but after 17 years of dodging the cuts, the cost to replace the SGR would be $175 billion over the next decade, according to the Congressional Budget Office.

There are rumblings that House leaders are again working on a permanent fix, this time costing $213 billion, reported the Associated Press. The tentative details include higher out-of-pocket expenses starting in 2020 for people buying new Medigap policies and raising premiums on Medicare doctors and drugs for people earning more than $133,000 a year.

More than 750 physician groups sent a letter to Congress urging policy makers to pass the framework developed last year, which eliminated the SGR formula and created new ways for physicians to participate in alternative payment and healthcare delivery models.

“We made significant progress in the previous Congress to find common ground for a Medicare fix that would establish a clear pathway for developing and implementing new health care delivery and payment models that improve quality, coordinate care and reduce costs,” Robert M. Wah, MD, president of the American Medical Association, said in a statement. “It would be a shame to once again let that solution, which took many months to develop, go to waste.”

The proposal being considered to fix the SGR formula would include $140 billion of costs being financed by adding to the federal deficits, according to the Associated Press, which has led to criticism from conservatives who do not want to add to the deficit.

However, Dr Wah argued in a blog post last month that years of passing temporary patches has proven more costly than fixing the SGR at this point and not only because the formula has made it difficult for physicians to budget and adopt reforms that improve quality and reduce costs.

“Congress has spent a staggering $170 billion on 17 patches in a 12-year period, the cost of which has far exceeded the cost of eliminating the SGR altogether,” he wrote.

Once Again, SGR Deadline Looms, as Ideas Emerge for a Permanent Fix