CBO: Repealing SGR may cost additional $60B over 5 years

The Congressional Budget Office (CBO) estimated that a proposed bill to repeal the Sustainable Growth Rate (SGR) formula and adjust Medicare payments to providers would increase spending by about $60 billion between 2014 and 2019 if enacted. Between 2014 and 2024, that amount would increase to $138 billion. 

In late 2013, lawmakers approved a temporary patch on the SGR through March 31. If that expires and they have failed to either pass a permanent repeal or extend the patch, then physicians will see a 24 percent cut in Medicare reimbursement.

The bill, S.2000, would take effect in April and would keep Medicare payment rates to physicians the same throughout 2014 and increase rates by 0.5 percent annually between 2015 and 2018.

Between 2018 and 2023, payment rates would remain the same, but could be adjusted based on physician participation in either a Merit-Based Payment System (MIPS) or an Alternative Payment Model (APM) program. MIPS program payments would be adjusted based on performance. From 2018 through 2023, physicians in the APM program would receive a lump sum totaling 5 percent of Medicare payments from the previous year. Providers with revenue close to the APM threshold would either receive no adjustment to Medicare payments or would receive the MIPS performance adjustment.  

The law also would eliminate penalties for not achieving meaningful use of EHRs or not reporting quality data. MIPS, however, would require EHR and quality standards.

A similar bill is under consideration in the House of Representatives.

The CBO's estimate was included in a Feb. 27 letter to Senate Finance Committee Chairman Sen. Ron Wyden, D-Ore.