CBO: Medicare SGR Patch Would Cost $8.3B

Legislation that would shield physicians from a 24 percent Medicare reimbursement reduction next year would cost about $8.3 billion from 2014 to 2018, according to a Congressional Budget Office report.

The proposal would delay the steep pay cuts required by Medicare's sustainable growth rate and give physicians a 0.5 percent payment update through March 2014, giving lawmakers extra time to repeal and replace the SGR, according to the report. 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 measure includes other provisions to offset the cost of the SGR patch, such as site neutral payments for some services performed in long-term care hospitals. The proposal would also delay Medicaid disproportionate share hospital payment reductions set to begin next year and last through 2022, shifting the cuts to 2016 through 2023.

Lawmakers have been working toward a permanent solution to the flawed physician payment formula. In October, the Senate Finance and House Ways and Means committees issued a proposal that would repeal and replace the SGR. The new proposal would repeal the SGR and maintain physicians' pay at current levels while alternative payment models are developed. Starting in 2017, the plan involves an initiative under which physicians would receive additional pay based on their performance.

The House Energy and Commerce Committee approved a similar proposal this past summer. The House legislation would get rid of the SGR 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. The bill would cost $153.2 billion from 2014 to 2023, according to the Congressional Budget Office.

More Articles on Medicare Physician Payments:
CBO Reduces Expected Cost of SGR Repeal to $153.2B  
CMS: Chronic Care Management, SGR Main Issues for Physician Pay in 2014  
AMA to Congress: Repeal Medicare SGR by End of Year 

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