SGR Update: How Much is the Repeal Cost for 2012?

Earlier this August, the Congressional Budget Office released a report indicating that lower spending projections to Medicare and Medicaid over the next decade will help lower the federal deficit.

The CBO also indicated that a repeal of the sustainable growth rate, the formula used to determine Medicare payments for physicians, would cost $245 billion — far less than the $316 billion and $271 billion estimates the CBO released earlier this year. Currently, physicians are on pace to see a 27 percent reduction in their Medicare rates if the SGR is not repealed or temporarily fixed.

However, Ken Perez, director of healthcare policy and senior vice president of marketing for MedeAnalytics, a healthcare analytics firm, says there's more to the numbers and the "apparent slowdown" of national healthcare spending.

"Calculating the cost of a freeze is interesting, but the only pieces of permanent SGR reform legislation before Congress carry higher price tags," Mr. Perez says. "HR 5707, The Medicare Physician Payment Innovation Act of 2012, only has a one-year freeze, with annual rate hikes for four years followed by to-be-determined new payment systems. It will certainly cost more than $275 billion. And SB 3337, The Access to Physicians in Medicare Act of 2012, raises rates each year by the lesser of the consumer price index or 3 percent, and it will cost $320 to $340 billion."

More Articles on the Sustainable Growth Rate:

SGR Not Included in Temporary Government Funding Resolution

Rep. Dr. Michael Burgess Proposes 1-Year Extension of SGR

6 Points on the Medicare Physician Fee Schedule Proposed Rule for 2013

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