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Senate Passes Medicare SGR Formula Repeal

Update: President Obama signed H.R. 2 into law.

On April 14, the U.S. Senate passed H.R. 2, legislation that would permanently repeal the Medicare Sustainable Growth Rate (SGR) formula, institute a new Merit-Based Incentive Payment System (MIPS) and provide for physician participation in Alternative Payments Models (APM). 

The $210 billion bill passed 92-8 and President Obama has said he will be "proud to sign it into law."  Without action, physicians would have faced a 21 percent cut in payments. 

This legislation repeals the Medicare SGR formula and replaces it with a new payment system, funds the Children’s Health Insurance Program (CHIP) and community health centers for two more years, and is partially paid for by having high-income seniors cover more of their Medicare costs and by requiring basic co-payments in Medigap plans.  Additionally, this legislation includes provisions that physicians will receive a 0.5 percent update for the initial five years of the law while a new system, known as the Merit-Based Incentive Payment System or MIPS, is implemented.  The MIPS program is effective in 2019.  The legislation also provides for physician participation in Alternative Payments Models (APM).

Prior to passage, Senators voted down a series of 6 measures, including amendments that would have repealed the individual mandate of the Affordable Care Act, extended funding for the CHIP program for four years, and repealed Medicare therapy caps.

Click here for a statement of ASA President J.P. Abenstein, M.S.E.E., M.D. on congressional action to repeal and replace the Medicare Sustainable Growth Rate (SGR) formula.

Click here for a summary of the new payment system.

Click here for the full text of H.R. 2 or click here for a section-by-section summary.

Click here to find how your Senator voted on H.R. 2.

Read more from ASA's Payment and Practice Management Department on the payment landscape post SGR.

Read CMS information on how it will resume claims processing.

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