House Energy and Commerce Committee Holds Hearing on Permanent SGR Repeal and Replacement
Committee Wrestles with How to Offset the Cost
January 23, 2015 12:20 PM
Earlier this week, the powerful House Energy and Commerce Subcommittee on Health convened a hearing entitled “A Permanent Solution to the SGR: The Time Is Now”. The purpose of the hearing was to discuss ways to advance a legislative solution to the flawed Medicare physician reimbursement formula known as the Sustainable Growth Rate (SGR), including how to offset the cost.
During the hearing, several of the witnesses endorsed proposals to restructure Medicare and increase cost sharing for seniors, including a home health copay. NAHC submitted a statement for the record urging the subcommittee to reject any proposal to impose a home health copayment to help offset the cost of the SGR fix.
To view the NAHC statement, click here.
Witnesses for the first day’s panel included Joseph I. Lieberman, former United States Senator; Alice Rivlin, Co-Chair, Delivery System Reform Initiative, Bipartisan Policy Center (BPC), and Director, Engelberg Center for Health Reform, the Brookings Institution; and Marilyn Moon, Institute Fellow at the American Institutes for Research. The second day’s panel included physician and nurse practitioner groups, the American Hospital Association, and AARP. Go here for more on the hearing.
Of note, last year the House Ways and Means Committee, House Energy and Commerce Committee, and Senate Finance Committee put forth a bill that would have repealed and replaced the SGR while instituting a 0.5% payment update for five years. The bill (H.R. 4015) passed the House in March but failed to advance in the Senate. On April 1, 2014, President Barack Obama signed into law theProtecting Access to Medicare Act of 2014 (PAMA) (Public Law No: 113-93), which extended Medicare physician pay rates for one year. The legislation served as a “patch” that prevented physician reimbursement rates from being slashed by 24% after March 31st, as was scheduled to occur under the SGR formula in the absence of Congressional action. This was the 17th such SGR “patch” enacted in the previous 11 years.
A key issue during the hearing – and one that sharply divided Democrats and Republicans – is not necessarily that a repeal to the SGR is needed, but rather if an offset needs to be included to pay for such repeal. The cost of such an offset is estimated to be about $140 billion.
The last SGR patch did not include any offsets in the form of cuts or copayments from the home health or hospice Medicare benefits. Other Medicare provider sectors sustained cuts to offset the cost of the SGR patch, including skilled nursing facilities, hospitals and clinical labs. The SGR patch expires March 31, requiring that either a permanent fix or another patch be enacted by then to avoid a 21 percent cut in physician payments. Home care and hospice advocates at NAHC’s upcoming March on Washington March 22-25 will have the opportunity to urge their Members of Congress to reject any proposal to impose home health and hospice payment cuts and copays to offset the cost of the SGR fix.
Despite significant support to use the SGR repeal to make structural changes to the Medicare program, Marilyn Moon of the American Institutes for Research stated that the SGR is “poor public policy and ought to be fixed”, but she insisted that “beneficiaries should not be penalized for the poor policy making that occurred fifteen years ago”. Moon challenged the assumption that any SGR fix proposals must be tied to program cuts, insisting that “nothing about Medicare’s stability requires that the Part B change (physician fix) be covered by some type of benefit cuts elsewhere”. She suggested that “unwise policies” across the federal government should be targeted as savings generators to offset SGR replacement, such as closing tax loopholes. Moon rejected proposals to increase Part B and D premiums, raise cost sharing requirements for beneficiaries, and raise the eligibility age. AARP also weighed in strongly against shifting more Medicare costs on to seniors through copays or other means and suggested savings could be achieved from prescription drug and Medicare Advantage reforms.
To send a letter to your lawmakers urging them not to impose home health copayments or payment cuts to pay for the SGR fix, please visit NAHC’s new Legislative Action Center.
To protect hospice from being used to pay for the SGR fix, please click here.