CBO: House SGR Bill Would Cost $121.1B

A House Ways and Means Committee bill that would repeal and replace Medicare's sustainable growth rate formula would cost $121.1 billion from 2014 to 2023, according to the Congressional Budget Office.

moneyThe bill — which the House committee approved last month — would repeal the SGR and increase Medicare's payment rates for physicians by 0.5 percent during calendar year 2015 and by another 0.5 percent in 2016. Pay rates under the physician fee schedule would remain at 2016 rates through 2023, but individual providers' reimbursement would also be subject to readjustment through a value-based performance incentive program or another alternative payment model. The Senate Finance Committee approved a similar proposal in December.

Increasing Medicare reimbursement rates for physicians would account for $118.4 billion of the cost of the bill, while establishing a value-based performance incentive program and alternative payment model program would drive up spending by $5.5 billion, according to the CBO. The bill would also save $2.8 billion through 2023 by requiring the development of Medicare payment codes to medical home use and care coordination.

The total cost is less than that of another bill meant to repeal and replace SGR. That bill, which the House Energy and Commerce Committee approved last summer, would get rid of the SGR and give physicians 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. The CBO has estimated the legislation would cost $153.2 billion from 2014 to 2023.

Members of the House and Senate have been working to find a permanent solution to the SGR. Every year since 2003, Congress has enacted a short-term legislative patch to delay the SGR cuts, a practice MedPAC said has provoked uncertainty and anger among providers and anxiety among beneficiaries. The latest patch — passed as part of the Bipartisan Budget Act of 2013 — delayed a required 24 percent Medicare pay cut and provide a 0.5 percent payment update for physicians through March.  

More Articles on Medicare's SGR:
Congress Considers How to Continue Medicare Provisions After SGR Repeal  
The $150 Billion Question: How to Pay for a Permanent SGR Repeal  
5 Key Facts About the Medicare SGR 

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