Compromise Reached on SGR Fix

Twitter icon
Facebook icon
LinkedIn icon
e-mail icon
Google icon

UPDATE ON 2/17/12 — The House and Senate have passed the Payroll Tax Cut extension bill that also includes the Sustainable Growth Rate (SGR) fix for Medicare physicians. The vote was 293 to 132 in the House and 60 to 36 in the Senate. President Obama has promised to sign the bill into law.

Congressional leaders have reached a tentative agreement to pay for a 10-month fix to the Medicare sustainable growth rate (SGR) formula that would have slashed reimbursement for Medicare physicians, including radiologist, by nearly 30% starting next month. In a replay of the partisan battles in late December, negotiations had become stuck over how to pay for the SGR fix — as well as the larger cost of a payroll tax holiday extension that was the main part of the bill.

Democratic leaders and the American Medical Association had proposed using savings from the winding down of military operations overseas to pay for the SGR fix. Republicans favored cuts in other areas of health care spending. According the the compromise reached by Congressional leadership, the money it will cost to not implement the SGR formula cuts for physicians for another 10 months will primarily come from cuts to a preventive care fund created by the Affordable Care Act and cuts to hospitals and other providers.

Earlier this month, the American Hospital Association strongly objected to paying for the doc-fix by cutting payments to hospitals.

“America’s hospitals strongly support fixing Medicare’s flawed physician payment system but not by further cutting resources for the hospital services upon which America’s seniors depend,” according to a letter addressed to Congress on Feb. 1.

Kaiser Health News has posted a summary of the health care portion of the compromise. Diagnostic imaging providers should note that the agreement also does not include a proposed Medicare program "extender" that would have increased payments for bone density scans.

The temporary nature of the SGR fix sets the stage for another partisan battle later this year over funding for yet another fix. Physician associations, including the American College of Radiology, have pushed for permanently repealing the SGR formula.