Congress agrees to repeal sustainable growth rate formula

Members of Congress have reached an agreement that would repeal the sustainable growth rate formula, which is used to determine Medicare reimbursement rates for physicians. The agreement allows for guaranteed annual reimbursement increases of 0.5 percent over the next five years for Medicare providers.

A bipartisan group of two committees in the House and Senate worked to establish a bill, called the “SGR Repeal and Medicare Provider Payment Modernization Act of 2014.”

The bill would repeal the SGR and begin to establish a reimbursement system that is focused on value and quality outcomes, according to news reports. The legislation - which still must be passed by both houses of Congress and then signed by President Obama - would also enact a process to improve payment accuracy, include clinical care guidelines created by physicians, and consolidate the three existing quality programs into one that would reward healthcare providers for meeting performance goals.

Congress has annually made “patches” to the SGR formula to allow for sustainable levels of Medicare payments to physicians. Usually these patches are passed every six months to a year, often shortly before the reimbursement rates are scheduled to decrease significantly.

This year’s deadline is March 31, after which Medicare reimbursement rates will drop by about 24 percent unless the legislation to repeal SGR is enacted.

Dermatologists have been paying close attention to the SGR battle and are looking into whether the SGR fix will be applicable to the specialty in a significant way.