U.S. House and Senate negotiators have reached agreement on legislation to repeal the Medicare Sustainable Growth Rate Formula for reimbursing physicians. But the $125 billion price tag for a new payment program could complicate passage.

A summary released by House and Senate leaders explains the deal: “This section repeals the SGR to provide long-term stability to the Medicare physician fee schedule,” according to a section-by-section summary of the agreement released by lawmakers.  “It provides stable updates for five years and ensures no changes are made to the current payment system for four years. In 2018, it establishes a streamlined and improved incentive payment program that will focus the fee-for-service system on providing value and quality.”

If enacted, the SCR would be permanently repealed and the industry would avert a 23.7 percent payment cut starting April 1, 2014. Physicians would receive an annual update of 0.5 percent from 2014 through 2018, with the rates in 2018 maintained through 2023. Physicians, however, could receive incentive payments during that time. Starting in 2014 and ongoing thereafter, physicians participating in alternative payment models would receive an annual update of one percent while others would continue at the 0.5 percent rate.

A new Merit-Based Incentive Payment System that starts in 2018, called MIPS, would streamline three current incentive programs: Physician Quality Reporting System, Value-Based Modifier and EHR Meaningful Use. MIPS would apply to the following types of professionals: doctors of medicine or osteopathy, doctors of dental surgery or dental medicine, doctors of podiatric medicine, doctors of optometry, chiropractors, physician assistants, nurse practitioners, clinical nurse specialists and certified registered nurse anesthetists. “Other professionals paid under the physician fee schedule may be included in the MIPS beginning in 2020, provided there are viable performance metrics available,” according to the summary of the agreement.

The proposed SCR Repeal and Medicare Provider Payment Modernization Act, H.R. 4015, soon will be available at congress.gov. Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association, issued this statement to Health Data Management: “The bipartisan bicameral SCR agreement today is a significant step forward in repealing the SCR and restoring stability to the Medicare physician payment system. Congress will now have to coalesce around a plan to pay for this legislation. The over $125 billion cost remains the most significant hurdle to its passage.”

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