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On the Hill: SGR Repeal and Replace, ACA Alternative

Both chambers of Congress are in recess this week. Last week, the House voted on a bill to permanently repeal and replace the Medicare physician payment formula, which is partially based on the sustainable growth rate (SGR), and offset the cost by delaying the Affordable Care Act’s (ACA’s) individual insurance mandate for five years. Although the bill passed 238-181, it is opposed by Senate Democrats and President Obama.

In the Senate, the newly minted Finance Committee Chairman Ron Wyden (D-OR) has made procedural moves to bring his own version of the SGR repeal and replace to the floor next week. Like the House, Wyden would permanently repeal the formula and replace it with a value-based performance program encouraging alternative payment models, care coordination, and best practices. However, his bill also extends certain health programs and does not offset any of the costs. The current patch to the SGR payment formula is set to expire at the end of March. Without congressional action, physicians caring for Medicare patients will see about at 24 percent payment cut.

House Republicans are working on an ACA alternative that would include greater use of health savings accounts, incentives to increase small business power in the insurance market, and more high-risk pools. GOP leadership is currently keeping quiet about the plan details, but Rep. Cathy McMorris Rodgers (R-WA) is expected to brief the caucus on the plan next month.

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About the Author

Walsh is the senior manager of legislative affairs for America's Essential Hospitals.

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