Senate to Consider SGR Reform Legislation

As the ASA Annual Meeting is set to begin, ASA has learned that the U.S. Senate plans to consider legislation that would end the application of the Sustainable Growth Rate formula (SGR) and put into place a permanent freeze of current Medicare payment rates. The bill will likely be brought first to a vote on Monday, Oct. 19.

In a meeting Wednesday called by Senate leadership and White House officials, the house of medicine first learned that S. 1776 would be brought to the Senate floor for a vote next week. At this point, few additional details have been made available regarding the legislation.

S. 1776, introduced last Tuesday by Sen. Debbie Stabenow (D-MI), is being fast-tracked for consideration under Senate Rule 14. To proceed, the Senate must vote Monday on “cloture” which requires at least 60 votes. The cost of the bill would not be offset.

Proponents of the measure stress that this is but the first step in reforming the unfair Medicare SGR formula by wiping the budget slate clean to the tune of a projected $240 billion dollars in physicians’ favor. At the same time, no clear path beyond the bill currently exists in the Senate as to what a reformed Medicare physician payment system would look like if S. 1776 were enacted. In the recently reported Senate Finance Committee health reform Chairman’s Mark, there is a proposed one-half of one percent update increase for Medicare physician payments for 2010 only in lieu of a projected 21% SGR cut if no Congressional action is taken.

ASA is seeking further information about how this new development could lead to larger Medicare reforms. We will provide additional details as they become known.

In the House, the health reform bill H.R. 2300 would eliminate the SGR and replace it with two target pools that would grow at statutorily set positive rates over the next decade. There has been talk that House negotiators could move these SGR provisions separately through the House for possible Senate acceptance or reconciliation with a differing Senate bill, such as S. 1776.

S. 1776