On March 14, 2014, by a vote of 238 to 181, the U.S. House of Representatives passed legislation to repeal Medicare’s sustainable growth rate (SGR) physician payment system. The “SGR Repeal and Medicare Payment Modernization Act” (H.R. 4015), establishes a new streamlined value-based incentive payment system called the Merit-Based Incentive Payment System, or MIPS. The new program consolidates the three existing Medicare incentive programs — Physician Quality Reporting System (PQRS), Electronic Health Records (EHR) and Value-Based Payment Modifier (VBPM) — and allows physicians to opt-out of the fee-for-service system in favor of participating in alternative payment models (APMs), such as accountable care organizations, patient-centered medical homes and other similar arrangements.
The bill, with a $138 billion price tag, was paid for with a 5-year delay of the Affordable Care Act individual mandate to purchase health insurance — a move that democrats charged was a partisan budgetary off-set and resulted in few democrats voting in favor of the legislation. The AANS and CNS did not take a position on the budget off-set debate.
Attention now turns to the U.S. Senate, where procedural steps have been taken to allow the Senate to consider two versions of the “SGR Repeal and Medicare Payment Modernization Act” — S. 2110, introduced by Sen. Ron Wyden (D-Ore.) and S. 2122, introduced by Sen. Orrin Hatch (R-Utah). The only difference between these two bills is the basis on which they would be paid. Sen. Wyden’s version does not include any budgetary offsets, and if passed, would add the cost of repeal to the nation’s budget deficit. The Congressional Budget Office (CBO) estimates this version will cost $180.2 billion over 11 years. In contrast, Sen. Hatch’s version includes a permanent repeal of the individual mandate to purchase health insurance as a mechanism to pay for SGR repeal, which will produce a net budgetary savings.
If Congress fails to act by the end of March, physicians face a 24 percent Medicare pay cut on April 1, 2014. It is unlikely, however, that this cut will go into effect and as Congress reportedly is also working on a temporary “patch” so work can continue on a permanent solution.