CBO: Bill Repealing Medicare SGR Would Cost $175B

Enacting a bill that aims to repeal and replace Medicare's sustainable growth rate would increase direct federal spending by about $175 billion from 2014 to 2023, according to a Congressional Budget Office report.

captiol buildingThe House Energy and Commerce Committee unanimously approved the bill this past summer. The bill would get rid of the SGR — the formula Medicare uses to determine physician reimbursement rates —  as of next year, and physicians would receive a 0.5 percent increase in Medicare reimbursements every year until 2018, after which they would receive payments based on quality reporting and outcomes. Starting in 2019, physicians could gain or lose 1 percent of their Medicare payments, depending on their quality scores.

Every year since 2003, Congress has temporarily bypassed the SGR so physicians would not have to endure double-digit cuts to their Medicare pay.

The bill would increase spending by $63.5 billion through 2018 by eliminating the cuts in payment rates that would occur under current law and establishing 0.5 percent pay increases every year through 2018. The budgetary effects after 2019 could vary depending on the impact of the quality payment incentive program and alternative payment model options the legislation would enact starting in 2019. However, the CBO estimates those payment mechanisms would increase spending by about $112 billion from 2019 to 2023.

More Articles on Medicare Physician Payments:
AMA President: Permanent Medicare SGR Fix Could Come This Year
House Committee Approves Medicare Physician Pay Reform Bill
Lawmakers Make Progress Repealing, Replacing Medicare's SGR Formula 

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