Congress introduces legislation to repeal SGR and reform Medicare provider payment

APAPO is working to ensure any new payment structures and incentives appropriately include psychologists.

Bipartisan legislation was introduced Feb. 6, 2014, that would repeal the Sustainable Growth Rate (SGR) formula and improve beneficiary access to services under the Medicare program. The bill would also set up new payment structures that are intended to improve patient care and constrain Medicare program cost growth. The legislation includes a 0.5 percent increase in provider payment rates for the next five fiscal years; an improvement over the potentially-devastating 24 percent cut to Medicare payments providers face on April 1 if Congress fails to take action. 

The SGR was created as part of the Balanced Budget Act of 1997 to help contain program costs and limit growth in Medicare provider payments related to the SGR. Congress has now intervened 16 times to avert staggering provider payment cuts, including a three-month extension as part of the Bipartisan Budget Act of 2014 that averts the 24 percent cut until April 1.

APAPO supports the legislation (SGR Repeal and Medicare Beneficiary Access Act of 2013, S. 1871 in the Senate, and SGR Repeal and Medicare Provider Payment Modernization Act of 2014, H.R. 4015 in the House) and submitted comments on Feb. 12, 2014 (PDF, 115KB), suggesting ways the legislation could also address underlying systemic problems with the Medicare physician fee schedule. 

“We applaud Congress’ work in developing this legislation to repeal the SGR,” says APA Executive Director for Professional Practice Katherine C. Nordal, PhD, “and we’ll continue to monitor the process to make sure any new payment structures and incentives place psychologists on an even playing field with other Medicare providers.”

For several months, the APA Practice Organization (APAPO) has been integrally involved in providing suggestions and feedback to the three committees in the House and Senate that drafted the legislation. Most recently, APAPO submitted a Jan. 29, 2014, letter (PDF, 118KB) to the House Committee on Energy and Commerce, House Committee on Ways and Means, and the Senate Finance Committee, the three committees with oversight over Medicare, about proposals each had approved to repeal the Sustainable Growth Rate (SGR) formula and update Medicare’s payment system. 

The SGR repeal process still has a long way to go; there is not yet consensus on how to pay for the more than $100 billion the legislation is projected to cost. Also, Senate Finance Committee Chairman Max Baucus is leaving Congress and will be replaced by Sen. Ron Wyden, D-Ore., resulting in leadership and staffing changes for the sole committee with jurisdiction over Medicare in the Senate, which could affect the process.

The most likely scenario is that without passage of the bill, Congress will again intervene with a stop-gap measure to prevent the SGR cut from taking place on April 1. We expect a delay in the SGR cut would apply through the end of 2014. 

Better Care, Lower Cost Act 

In addition to SGR repeal, APAPO continues to address other legislation related to Medicare payment and the inclusion of psychologists in the evolving health care system. On Feb. 11, APAPO submitted comments on the Better Care, Lower Cost Act (S. 1932) (PDF, 115KB), introduced by Sen. Wyden, which establishes an integrated chronic care delivery program (Better Care Program, or BCP) that promotes accountability and better care management for chronically ill patient populations, while encouraging redesigned care processes that result in high quality and efficient service delivery for the most vulnerable and costly populations. APAPO suggested amendments that would better integrate psychologists and mental health and substance abuse services with the integrated care services proposed in the legislation.

APAPO will continue our advocacy efforts regarding SGR and other Medicare-related legislation and will be calling on practitioners to take action with their members of Congress.