Transparent Medicare Physician Payment Reform Process Gains Momentum - Committee Releases Advanced Legislative Framework

Press Release

House Energy and Commerce Committee leaders today unveiled an advanced legislative framework to repeal the current Sustainable Growth Rate (SGR) system and replace it with a fair and stable system of physician payment in the Medicare program. The draft legislation is the latest step in the transparent process to reform the system and reward providers for delivering high-quality, efficient health care. For over two and a half years, Chairman Fred Upton (R-MI) and Ways and Means Chairman Dave Camp (R-MI) have closely collaborated in this effort to reform the current Medicare system in a way that is fiscally responsible and free of politics.

The advanced draft legislation unveiled today incorporates feedback received from a broad range of bipartisan lawmakers and over 80 stakeholder organizations, representing ideas of committee Republicans and Democrats. The policy would repeal SGR and, in return, replace it with an improved fee for service system in which providers develop quality measures that will lead to better care in a more efficient manner. Better quality care will lead to better outcomes and put a greater emphasis on efficiency which can lead to cost savings. In addition, providers will have the option of leaving the fee for service system and opt instead for new ways of delivering care that put an even greater emphasis on quality and efficient care, particularly those that can mean more time with patients and more savings to the system.

"With two and a half years of effort, we're pleased to take the next step toward permanently repealing the flawed SGR and replacing it with a system that incentivizes quality care. We remain committed to a deliberate and transparent process as we work to help our doctors, help our seniors, and ensure we have a fair system with the best quality of care in the world," said Chairman Upton. "Our partnership with colleagues across the aisle and on the Ways and Means Committee has made this great progress possible. This is still a work in progress, but make no mistake, the final product will secure a long-term, fully paid for solution that improves quality of care and, once and for all, removes the gimmicks that have plagued the SGR system."

Health Subcommittee Chairman Joe Pitts (R-PA) said, "This latest draft brings us closer than ever before to a meaningful SGR replacement by incorporating input from dozens of stakeholders as well as ideas from a diverse group of bipartisan lawmakers. We continue to be engaged with committee Democrats and strive for a bipartisan solution -- and rest assured, any reform will be fiscally responsible. The feedback from stakeholders in this process has been invaluable, and I'm confident that this honest, open process will ensure a stronger, more reliable Medicare program for our doctors and patients."

Health Subcommittee Vice Chairman Michael C. Burgess, M.D. (R-TX), added, "Today we are moving one step closer to repealing SGR and replacing it with a common sense solution that keeps doctors in practice and maintains access for their patients. Throughout the process we have worked hard to ensure a transparent system that considers the opinions of everyone that will be affected by this new policy. This is another important step in that process and I look forward to hearing feedback on how we can continue to improve the framework as we move towards a permanent Medicare fix."

Committee leaders continue to seek feedback from interested stakeholders and request comments be sent to SGRComments@mail.house.gov by July 9.

BACKGROUND: Enacted in 1997 as part of the "Balanced Budget Act," the Sustainable Growth Rate has been a source of continued concern for physicians who serve Medicare beneficiaries and for the beneficiaries themselves. Long recognized as an imperfect solution that rewards quantity of services rather than the quality of care, Congress has repeatedly implemented a temporary "doc fix" to prevent substantial Medicare reimbursement rate cuts, which could result in fewer physicians being able to serve Medicare patients.

2013 SGR Reform Milestones

February 7, 2013 - Energy and Commerce and Ways and Means Committee leaders outline a framework to reform the current Medicare system. Committees ask for feedback on the outline by February 25.

February 14, 2013 -- Energy and Commerce Subcommittee on Health holds hearing on "SGR: Data, Measures and Models; Building a Future Medicaid Physician Payment System."

April 3, 2013 -- Leaders from the House Energy and Commerce and Ways and Means Committees outlined additional details of a proposal to repeal the SGR system. The leaders also sent a letter to the provider community requesting feedback. The leaders requested stakeholder feedback by April 15.

May 28, 2013 - the Energy and Commerce Committee unveiled a draft legislative framework, seeking further stakeholder input by June 10.

June 5, 2013 -- Subcommittee on Health holds a hearing on "Reforming SGR: Prioritizing Quality in Modernized Physician Payment System"

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