Keeping you updated on the latest Medicare and Part D news

Update on Medicare’s Sustainable Growth Rate

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The bipartisan proposal to replace the Sustainable Growth Rate with a 0.5% annual increase for Medicare physicians, as discussed in a previous blog post, passed in the House last Friday but is very unlikely to become law.  The bill, which would eliminate the impending 24% cut to Medicare physician payments on April 1st, would cost an estimated $138 billion according to the Congressional Budget Office (CBO). To offset this cost, House Republicans proposed delaying the Affordable Care Act’s individual mandate by five years. This is unlikely to pass in the Senate, and the Obama Administration has already announced that the bill, with its current funding mechanism, would be vetoed.

The Senate has its own version of the bill, but it does not provide a funding mechanism. The CBO estimates that the Senate version would cost about $180 billion. The Senate bill is costlier because it includes funding to expiring programs for rural hospitals.

Congress has until March 31st to stave off the 24% cuts, which would have serious consequences on the willingness of physicians to participate in Medicare.



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