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Update on Sustainable Growth Rate

August 6, 2012 | Comments Off on Update on Sustainable Growth Rate
Posted by Frank Ciesla

Legislation has been proposed in regard to the Sustainable Growth Rate (“SGR”) to avoid adversely affecting physician payment for another year, effective January 1, 2013.  The Congressional Budget Office (“CBO”) has scored the proposal.  The CBO has determined that “a one-year Medicare physician payment “patch” that would block a scheduled 27 percent reimbursement cut Jan. 1 and instead continue the same rates doctors now receive would require offsets totaling $18.5 billion over 10 years”.  (See Report).   However, the proposed joint action of the House and Senate to continue funding government operations through March of 2013, does NOT include any funds for the “patch”.

As you can see, even under the proposed legislation, there is no intent to permanently resolve the problem created by the SGR.  The simple reason for this is the fact that the CBO is required to score any proposed legislation based upon the law in effect at the time of the scoring.  Therefore, when the CBO scores any health care legislation, it has for the last number of years always determined that the viability of the legislation includes the reductions to physician payment required by the SGR, as set forth in the then current legislation.  Therefore, should the proposed legislation be enacted, deferring the implementation of the SGR either for one year until January 1, 2014 or two years January 1, 2015, any scoring of health care legislation during that period of time will be based upon the reduction of physician fees as of either January 1, 2014 or January 1, 2015.  Based upon its historical track record, Congress has never implemented the physician cuts required by the SGR, but has always kicked the can down the road for a short period of time.

It is likely that this legislation, for at least one year, will pass so that the cliff faced by physicians on January 1, 2013 will now be pushed out to January 1, 2014 or January 1, 2015, but it also appears that it will not go away and will not be a permanent resolution of the issue.


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