Dec. 9—The 10-year cost of scrapping Medicare’s physician pay formula dropped again in the latest government estimate.

The Congressional Budget Office (CBO) recently revised downward the projected 10-year cost of repealing Medicare's sustainable growth rate (SGR) physician payment formula from $139 billion to $116.5 billion. Both are lower than the August 2012 estimate of $271 billion of eliminating the cost control system that linked the growth in reimbursements to healthcare inflation.

The new, lower price tag could increase the chances that Congress will finally act to scrap the payment formula, which has drawn widespread derision from providers, according to a congressional leader of that effort. 

“Fixing the flawed Medicare payment formula is some of the most important work facing this Congress,” Rep. Michael Burgess (R-Texas), said in a release after the estimate was issued Dec. 6. “I am certain that this new estimate by the CBO will accelerate the pace in passing this bill. Now is the time to repeal the broken SGR and replace it with a system that is good for both doctors and seniors.”

The CBO analysis also cut the cost of Burgess’ legislation, which eliminates the SGR cuts but also provides rate increases for some physicians by about $22 billion to $153.2 billion. The bill was passed by the energy and Commerce Committee and may receive consideration from the ways and Means Committee this week.

The Senate Finance Committee has scheduled a review of a bipartisan SGR repeal package on Thursday.

Despite the declining cost, the longstanding and ongoing obstacle to SGR repeal remains the inability of Congress to identify a bipartisan way to pay for eliminating the Medicare cost-control mechanism. 

Without congressional action, the formula would initiate a 24 percent cut in Medicare physician rates in January. Previously planned cuts have required Congress to pass last-minute temporary patches.

Publication Date: Monday, December 09, 2013