H.R. 2810, the Medicare Patient Access and Quality Improvement Act of 2013, is the latest legislative proposal to permanently repeal the sustainable growth rate (SGR) provision, a formulaic approach intended to restrain the growth of Medicare spending on physician services. Physician-turned-congressman Rep. Michael C. Burgess (R–Texas) introduced the bill to the House of Representatives in July.Ken Perez

The Congressional Budget Office (CBO) recently estimated that the cost of H.R. 2810, a permanent SGR repeal or “doc fix,” would be $175.5 billion over 2014-23, up from the CBO’s estimates of $139.1 billion in May and $138 billion in February for freezing (i.e., holding flat) all Medicare physician rates for 10 years. 

H.R. 2810 differs from other SGR reform proposals. Like all other SGR reform bills, H.R. 2810 would avoid an estimated 24 percent reduction to Medicare physician payment rates that is slated to take effect Jan. 1, 2014, but the bill would also raise payment rates by 0.5 percent per year from 2014 through 2018. That change would increase federal spending by $63.5 billion through 2018, relative to the spending projection under the SGR.

In addition, starting in 2019, H.R. 2810 would either set Medicare payment rates for physician services based on a physician’s performance in the Quality Update Incentive Program (QUIP) or possibly provide for physicians to be paid for some or all of their Medicare services under an alternative payment model (APM). There will be a number of APMs, which are yet to be determined, but they will almost assuredly include accountable care organizations. Making certain assumptions about physician participation in QUIP versus APM, the CBO projects that these two mechanisms will increase federal spending by approximately $112 billion versus current law for 2019-2023. 

Unfortunately, like every SGR reform proposal introduced during the past three years, H.R. 2810 does not specify a legitimate source of funding to cover the increased government spending that would result. 

Thus, in large measure, to borrow a phrase from the English rock band Led Zeppelin, the SGR reform song remains the same: a high price tag with no one to pay the bill.

Ken Perez is the author of The Sustainable Growth Rate: The Elephant in the Room of Deficit Reduction and a healthcare IT and policy consultant in Menlo Park, Calif.

Publication Date: Friday, September 20, 2013