On October 30, 2013, the Senate Finance Committee and the House Ways & Means Committee released a bicameral, bipartisan discussion draft outlining a proposal to permanently repeal the sustainable growth rate (SGR) mechanism and reform the physician payment system. In addition to payment system reform, the draft proposal makes a number of other payment policy changes impacting care coordination and valuation of services, and would expand access to and transparency of Medicare data. The Congressional Budget Office has scored repeal of the SGR at $139.1 billion over 10 years. The draft does not include any potential offsets to this cost, nor does it include other Medicare extenders that may be part of the final package.

SGR Repeal and Reform -

The proposal would eliminate the SGR, and freeze physician payments at current levels for 10 years (2014-2023). The proposal would also reform the current physician payment system by combining and strengthening existing quality and value incentive programs and encouraging physicians to participate in alternative payment models (APMs). The proposal would create two tracks for physicians and other professionals traditionally paid under the physician fee schedule: “Track 1,” a mandatory value-based performance (VBP) program; and “Track 2,” a bonus program for risk-sharing APMs. The new system would be phased in over a number of years.