House Repeals SGR

The AMA Bulletin below provides a good summary of the bill and House actions that led to passage.

By a vote of 243-183 today, the U.S. House of Representatives passed H.R. 3961, a bill that repeals the current Medicare physician payment formula, known as the sustainable growth rate (SGR), and replaces it with a new framework. Michael Burgess, MD, (R-Texas), a former AMA alternate delegate was the sole Republican to vote for final passage.

This legislation would replace the SGR with a new formula that creates two updates: GDP +2 for Evaluation and Management services and GDP + 1 for other services. Additional technical changes will avoid the accumulation or compounding of debt that occurred with the SGR formula.

House Speaker Nancy Pelosi (D-Calif.), House Majority Leader Steny Hoyer (D-Md.), House Committee on Ways and Means Chairman Charles Rangel (D-N.Y.), House Ways and Means Health Subcommittee Chairman Pete Stark (D-Calif.), House Committee on Energy and Commerce Chairman Henry Waxman (D-Calif.), Rep. Frank Pallone (D-N.J.), the bill's sponsor Rep. John Dingell (D-Mich.), and the Obama Administration were strong advocates for passage of H.R. 3961.

House Republican leadership offered a last-minute alternative that would have provided for 2 percent updates over the next four years, reverting back to the SGR and steep cuts. Also, it would have offset the cost with medical liability reforms modeled after California and Texas laws. The AMA opposed the motion to recommit because we do not support any temporary "patches" for the SGR. A permanent repeal is long overdue. The motion to recommit with medical liability reform provisions was ruled non-germane. A second GOP alternative providing for a two-year "patch" was defeated by a vote of 177-253.

The battle now shifts back to the Senate. While action to permanently repeal the SGR was blocked in the Senate last month, the Obama Administration and several senators support a permanent replacement of the SGR formula. The health system reform bill released by Senate Majority Leader Harry Reid (D-Nev.) provides for a one-year reprieve with a steeper cut in 2011. The AMA does not support temporary patches that further grow the problem.

No one expects Congress to allow the 21 percent cut scheduled for Jan. 1 to occur. We regret that Congress has deferred action until the "eleventh hour." The AMA will redouble our efforts in the Senate and with the Obama Administration to achieve a permanent solution.