The Future of the SGR: 2015 and Beyond

Kenneth J. Terry, MA


February 03, 2015

In This Article

Is There Hope for an SGR Replacement Measure?

The clock is ticking toward April 1, when the latest sustainable growth rate (SGR) fix expires and physicians are due to get a 21% cut in Medicare payments. Some members of Congress are trying to eliminate the SGR payment methodology once again. In late January 2015, a House subcommittee held hearings on how to build upon last year's SGR replacement bill, which passed the House but died in the Senate after the parties were unable to agree on how to pay for it.

It's likely that an SGR replacement measure based on last year's bill will emerge from the full committee in the near future, judging by the statements of Rep. Fred Upton (R-Michigan), chair of the House Energy and Commerce Committee, and Rep. Joe Pitts (R-Pennsylvania), chair of its health subcommittee. But it will still have to win the backing of the House Ways and Means Committee, headed by Rep. Paul Ryan (R-Wisconsin), and the Senate Finance Committee, chaired by Sen. Orrin Hatch (R-Utah). In addition, it will need the support of the Congressional leadership to be voted on and passed.

Those are tall hurdles to surmount before April 1. Still, medical association leaders are optimistic that a bill along the lines of last year's legislation will be approved this time around.

For one thing, they note, the policies embodied in the 2014 measure have bipartisan support. Hatch and Upton were involved in formulating that bill and can be counted on to support it this year. Ryan has not staked out a position on it but will have to deal with the SGR issue soon because it's part of his committee's turf, notes Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association (MGMA).

One hope has already been dashed. The hope of lobbyists for the American Medical Association (AMA) and the American Academy of Family Physicians (AAFP) has proved false. The association representatives believed that the new Republican majorities in both houses might be willing to approve the SGR bill without finding ways to offset its cost, estimated at $144 billion over 10 years. But in their statements at the health subcommittee hearing, Pitts and Upton said that the legislation must be paid for.

That was the sticking point last year, and it appears that it will continue to be a difficult issue to negotiate. "For me, it's a question of whether they can meet the March 31 deadline," said Julius Hobson, senior policy advisor to Polsinelli, a Washington, DC, law firm. The former AMA lobbyist added, "I'd anticipate some tweaks to the compromise bill they had last year. But that's not the problem. The real problem is pay-fors and how they're going to do that."


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