SGR Update - Dec 14, 2011

December 14, 2011

To: HBMA (http://www.hbma.org) Membership
From:   HBMA Government Relations Committee
Re:        SGR Update

Late yesterday, the House of Representatives passed a bill, H.R. 3630 that would, among other things, "fix" the SGR problem for 2 years.  Under this bill, instead of a 27.4% cut in the Medicare Physician Fee Schedule Conversion Factor (CF) due to the SGR, there would be a 1% increase in the Medicare Conversion on January 1, 2012.  In addition the bill would authorize another 1% increase in the CF on January 1, 2013.

If Congress fails to fix the SGR between now and the end of 2013, the SGR formula would mandate a cut in the CF in excess of 30% on January 1, 2014. 

It is highly unlikely that the U.S. Senate will join the House in passing H.R. 3630 as presently written.  In addition to a short-term SGR fix and extending the payroll tax cut (both enjoy broad bi-partisan support), the bill would make a number of other changes to federal policy that many consider controversial. For example, the bill would make significant cuts in hospital payments, Rural Health Clinic payments, Skilled Nursing Facility payments, expand means testing under Medicare, mandate construction of the Keystone Oil pipeline and make controversial reforms to the unemployment insurance program. 

While fixing SGR continues to enjoy broad bi-partisan support, there is no agreement on how the "fix" should be paid for.  According to the Congressional Budget Office, temporarily repealing the 27.4% SGR cut and replacing it with 1% increases for two years, would increase Medicare expenditures by approximately $38 Billion over the next 10 years.  The savings that would result from the Hospital, SNF, RHC payment cuts and Medicare means testing provisions mentioned above would be used to "offset" the cost of the temporary SGR fix. 

The Senate majority appears to favor raising taxes on the wealthy as the principle means of offsetting the cost of both the SGR fix as well as the payroll tax extension.  The House has indicated that this is unacceptable and therefore we find ourselves in a political game of chicken.

Publicly and privately, Members of Congress from both parties and both houses continue to say that enacting legislation to avoid the 27.4% SGR related cut prior to the January 1 effective date continues to be a high priority.  Given the broad support for fixing the SGR, it is disconcerting that the two bodies have been unable to reach consensus on how to pay for the fix. 

The Healthcare Billing and Management Association (http://www.HBMA.org) continues to urge Congress to enact legislation to avoid the draconian 27.4% cut that is looming over the heads of physicians and their patients.  In addition, we continue to point out the significant administrative costs that would result in the event that Congress were unable to reach a compromise prior to January 1, 2012 and instead, enact legislation retroactively fixing the SGR problem after January 1. 

Contact Congress and let them know that SGR needs to be fixed NOW.

HBMA has made it extremely easy for you and your clients to reach out to Congress and let them know how you feel about the need to fix the SGR problem.  If you have not done so already - and even if you already written - you are strongly encouraged to contact your Senators and Representatives and let them know how you feel about their failure to fix the SGR problem. 

Visit the HBMA Government News page and after logging into the website click on our 'Congress Contact Tool' and follow the instructions on how to send an electronic message to your Representative and Senators.