Current proposals to repeal the Medicare Sustainable Growth Rate formula and replace it with a new payment system could cost anywhere from $121 billion to $150 billion over the next decade, according to new estimates from the Congressional Budget Office.
Legislation (H.R. 2810) approved by the House Ways and Means Committee in December is the least expensive option. It would cost about $121 billion over 10 years, according to the CBO projection. That bill includes 2 years of 0.5% pay updates for physicians and begins to partially tie payment to performance.
A more expensive option (S. 1871), approved by the Senate Finance Committee in December, would cost $150.4 billion through 2023, the CBO estimated. The Senate version would freeze physician payments for the next decade, but would allow physicians to earn more by participating in alternative payment models or another incentive program that measures quality of care and resource use.
©sndr/istockphoto.com
A replacement for the Sustainable Growth Rate formula could cost over $100 billion, the Congressional Budget Office estimates.
The additional cost for this bill comes from extending some Medicare and Medicaid programs; the physician payment portion alone would cost about $111.5 billion over 10 years, CBO predicted.
The price tag will have a big impact on whether Congress can pass an SGR repeal bill this year. The Medicare fee cut for 2014 – which was to kick in Jan. 1 – was replaced by a 0.5% physician pay increase through March 31. But the cut will take effect on April 1 if Congress does not enact either another temporary SGR fix or a permanent repeal of the formula.
While there has been widespread bipartisan support for SGR repeal, there has yet to be any serious discussion of how lawmakers would pay for the fix. Physician groups, which have been deeply involved in the policy discussions surrounding SGR repeal, have also remained silent on how to pay for it.
mschneider@frontlinemedcom.com
On Twitter @maryellenny