On Thursday, bipartisan Congressional leaders unveiled the preliminary details of their plan to permanently fix the flawed Sustainable Growth Rate formula.
House Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-California) have been negotiating a deal that would replace the SGR with an annual .5 percent increase to physician Medicare rates for the next five years. The plan would also improve the fee-for-service system by streamlining Medicare’s existing quality programs into one value-based performance program. As well, the plan requires Medicare providers to receive at least 25 percent of their revenue through these Alternative Payment Models (APM) by 2019-2020, with the threshold increasing over time.
The bipartisan, bicameral package is expected to cost $210 billion over the next ten years, with offsets of only $70 billion of that currently accounted for with provider cuts and beneficiary cuts, including a plan to ask wealthier seniors to pay higher premiums.
Before the plan will be brought to a vote, legislators expect more details to be unveiled and continued debate over how it will be paid for. A two-year extension of the Children’s Health Insurance Program (CHIP) is expected to be included in the deal. However, some Democrats have threatened to vote no on any measure that doesn’t pay for CHIP for at least four more years. Also, The Hill has reported that some Republican leaders say the increased costs of the plan would continue into a second decade, amounting to as much as $400 billion over the next twenty years.
If the proposed permanent plan does not pass by March 31, 2015, most industry experts expect Congress to approve another temporary fix to the SGR—this would be the eighteenth—to avoid a 21 percent cut to physician Medicare payments. Expect movement on the permanent deal or a temporary fix in the next few days as Congress has a planned recess for Easter/Passover that begins at the end of session March 26 and extends through the opening of the next session on April 13.
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