Will there be a permanent 'doc fix' this year? 15 things to know

Although there is chatter on Capitol Hill that the House could vote on a permanent solution to the sustainable growth rate as early as next week, it is still likely the issue will just get another short-term patch.

Here are 15 things to know about the SGR formula and the repercussions if Congress doesn't take action by March 31 to approve a temporary or permanent "doc fix."

1. The SGR formula was created in 1997 when the Balanced Budget Act amended the Social Security Act. The SGR formula was put in place to control growth in Medicare spending for physicians' services by establishing targets for expenditures, according to CMS.

2. The formula's methodology, which the Medicare Payment Advisory Commission has told Congress is "fundamentally flawed," encourages providers to administer higher volumes of services because it ties cumulative expenditures to annual payment increases.

3. Congress allowed a 4.8 percent reduction in Medicare payments to physicians to take place in 2002. However, Congress has enacted a short-term legislative patch, or "doc fix," to delay SGR cuts every year since then.

4. If the SGR formula cuts are allowed to take place this year, healthcare providers could see their Medicare payments reduced by an average of 21.1 percent on April 1, 2015, according to the final 2015 payment rules for Medicare from CMS.

5. Through two identical pieces of legislation introduced in the Senate and House in 2014, lawmakers are attempting to implement a permanent replacement to the SGR. The political divide comes, though, in how to pay for a permanent solution.

6. Replacing the SGR formula, as proposed in the bipartisan legislation, would cost $174.5 billion from fiscal year 2015 to fiscal 2025, according to the Congressional Budget Office.

7. President Barack Obama also recognizes the need for a permanent solution to the SGR. He proposed repealing the SGR formula in his 2016 budget.

8. Although the SGR has drawn a great deal of criticism, there is not consensus in the healthcare industry regarding how problems with the SGR should be resolved.

9. The American Hospital Association believes there needs to be a permanent fix to the SGR and supports the overall goal of the bipartisan legislation. However, the legislation doesn't include suggestions for how the costs of the proposed fixes will be covered, and the AHA said in January it "cannot support any proposal to fix the physician payment problem at the expense of funding for services provided by other caregivers."

10. In February, the AHA and nine other hospital groups sent a letter asking Congress to oppose legislation that includes additional Medicare payment cuts to hospitals to fix the SGR. In making their case to Congress, the groups said the annual "patching" of the SGR has led to hospitals receiving reductions totaling nearly $122 million since 2010.

11. As of March 10, it was looking like there was going to be another temporary fix put in place, according to a National Review report. Although the exact length of the patch hadn't been determined at that time, healthcare lobbyists told the National Review a three- to six-month patch seemed to be the most likely option.

12. If a temporary fix is put into place this year, it would be the 18th time the payment cuts have been blocked by Congress, according to the National Review.

13. House Speaker John Boehner (R-Ohio) is working on a bill that would provide a permanent solution to the SGR, according to The Hill. However, a permanent fix would likely face resistance in the Republican-controlled Congress as GOP leaders are trying to cut trillions of dollars from spending under a new budget blueprint. More details regarding any short or long-term fix are expected in the near future, as a Democratic aide told The Hill GOP discussions on a Medicare fix "reached critical mass" this week.

14. Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, did offer some hope that a permanent fix would be achieved before the end of March. "What we are hearing from the House suggests there is real movement to fully repeal and replace the flawed formula for paying Medicare providers known as SGR," Sen. Wyden wrote in a March 11 statement, according to The Hill.

15. Although there is still time for a permanent solution to be arrived at before the cuts are scheduled to take effect April 1, the majority of "healthcare experts had anticipated that Congress would again seek a one-year extension of the formula, after drawn-out debates last year that prevented a more lasting fix," according to The Hill.

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