Medicare: Time for Congress to repeal and replace the 'Sustainable Growth Rate' formula

Over the last 12 years, Congress has spent nearly $150 billion crafting makeshift provisions in an effort to patch a problem that is in dire need of more than just a temporary Band-Aid. Without question, the Sustainable Growth Rate (SGR) is one of the biggest challenges facing the Medicare system to date, and Congress’ failure to pass a permanent fix to SGR has had considerable consequences on our nation’s seniors and physicians.

For more than a decade, doctors have faced uncertainty as to whether or not they will endure massive cuts in their Medicare payments—and this year is, unfortunately, no different.

The entire medical community recognizes the problem with the SGR, and now Congress has a responsibility to stop the bleeding.

Unless Congress acts by March 31, doctors face a 22-percent cut to their Medicare payments, which will undoubtedly have a negative effect on their ability to treat Medicare patients and ultimately hinders seniors’ access to quality care.

The entire medical community recognizes the problem with the SGR, and now Congress has a responsibility to stop the bleeding.

Instead of letting yet another golden opportunity pass us by, it’s time for Congress to permanently repeal and replace the SGR formula for Medicare reimbursement.

Congress introduced the SGR formula in 1997 in an effort to keep Medicare spending down. While the formula was initially effective, it failed to consider the rising cost of medical services and the likelihood of a fluctuating economy.  Because the SGR formula is tied directly to our nation’s Gross Domestic Product (GDP), it has proven over time to be ineffective as the reimbursement formula is based on an assumption that there will be economic growth each year.

Because of the flawed formula, Congress has had to pass temporary patches each year since 2003 in order to preserve reimbursement funding for doctors treating Medicare beneficiaries. In total 17 temporary patches, also known as the “Doc Fix,” have been enacted since 2003 in order to prevent these unsustainable cuts.

The total cost of these short-term patches amounts to nearly $150 billion taxpayer dollars —which is almost the total cost of repealing and replacing the flawed law itself.  This inefficiency has created dysfunction within our healthcare system and generated dissatisfaction among healthcare providers. Furthermore, temporary fixes do nothing to provide certainty and stability for our seniors and our physicians who care for them.

However, last year, Congress made substantial progress in crafting and passing a permanent solution to this problem. This legislation would repeal the SGR and transition Medicare away from a system based on volume to one based on value. This bipartisan and bicameral legislation was unanimously reported out of the House Energy & Commerce Committee, House Ways & Means Committee, and the Senate Finance Committee— it represented fiscal responsibility and certainty for our seniors and doctors.  It had a onetime cost of $138 billion dollars.  While this number steep, it actually represents a huge discount from years past when the score was $298 billion in 2011.

It’s time we in Congress do our job and show leadership by enacting permanent legislation to repeal and replace the flawed SGR formula. The entire medical community recognizes the problem with the SGR, and now Congress has a responsibility to stop the bleeding. We have drafted a meaningful, proactive solution—and now Congress must have the courage and political will to see it through. Continually kicking the can down the road is only perpetuating Washington’s spending problem, while yet another SGR deadline quickly approaches.

In the health care realm, every passing minute comes at a price. Our nation’s seniors deserve more than a temporary patch. They need certainty, they need reliability, and we owe them a permanent solution to a problem that has been left deteriorating on life support for far too long.