26 March 2015

Legislative Alert: House Overwhelmingly Passes SGR Reform

Today, the U.S. House of Representatives overwhelmingly passed H.R. 2, the Medicare Access and CHIP Reauthorization Act, by a vote of 392-37. The legislation will now go to the Senate where it awaits further action. A section by section summary can be found here.  Senate Finance Committee Chairman Orrin Hatch (R-UT) has endorsed the legislative package and the President has indicated his intent to sign the legislation into law.

The SGR legislation would:

  • Repeal the SGR while instituting a 0.5% payment update each year for five years through 2019; after 2019, there will be a 0.0% update for the next five years
  • Consolidate Medicare’s existing quality programs into one value-based performance program
  • Incentivize the use of alternative payment models
  • Increase access to information on physician services

Additional policies include:

  • A two year extension of CHIP
  • A two year extension of certain Medicare and Medicaid programs

This legislation also creates the following savings

  • Increased means testing of Medicare beneficiaries
  • Medigap reform
  • Increase Levy Authority on Payments to Medicare Providers with Delinquent Tax Debt.
  • Extension of Medicaid DSH cuts
  • Phase in of Hospital Update
  • Decrease Market Basket update for Post-acute care providers in 2018

The bill costs more than $200 billion dollars and approximately $70 billion of the bill would be paid for, according to the Congressional Budget Office analysis. Supporters of the bill argue that the constant “patches” to avoid cuts to physician payments are not fully paid for either, and another patch would be the alternative to full SGR repeal. Supporters of the repeal effort also point to the need to “get this off of their plate,” as SGR patches continue to be an onerous annual ritual that must be ended.

The Senate could vote on the House passed bill before it goes into recess on March 27 or it could delay action until Senators return to Washington on April 13.  If legislation is not passed before the expiration of the current patch on March 31, we expect CMS to place a hold on paying Medicare Part B claims, as it has done under similar circumstances in the past, until Congress resolves the situation.

AMGA will keep you updated and provide further analysis in the coming days.  If you have any questions, please contact Garrett Eberhardt, AMGA’s Manager of Government Relations at