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House, Senate Committees Release Bipartisan, Bicameral SGR Replacement Discussion Draft

Wednesday, October 30, 2013  
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Leaders on the House Ways and Means Committee and the Senate Finance Committee released a bipartisan discussion draft this week outlining their recommendations for repealing and replacing the flawed sustainable growth rate (SGR) physician payment system. The draft builds on legislation that passed unanimously in the House Energy & Commerce Committee earlier this year. In addition to repealing the SGR formula, the draft is intended to provide framework for transitioning Medicare payments away from the fee-for-service model.

The draft proposal would freeze payment rates for 10 years and allocate bonuses to doctors who accept certain percentages of Medicare revenue by practicing new value-based payment methods. The draft allows for a 5 percent bonus from 2016 through 2021 for doctors who exercise managed care practices for a significant share of their revenues. After 2023, those using alternative payment methods would see a 2 percent increase each year while those who continue to operate under a fee-for-service model would only receive a 1 percent increase.

The latest discussion draft varies slightly from the House Energy & Commerce Committee recommendations. The House E&C draft did not freeze payments for 10 years. Instead, the committee proposed annual 0.5 percent increases for five years.