A bill to reform the sustainable growth rate (SGR) formula continues to advance, albeit slowly, within the House Energy and Commerce health subcommittee.
 
Reps. Fred Upton, R-Mich., and Joe Pitts, R-Nev., on May 28 issued a draft bill to permanently abolish the SGR and phase in a new payment system based on a fee-for-service formula, but with part of doctors’ pay based on quality measures. The draft, which the congressmen say is still “not set in stone,” is based on proposed reforms that Upton and House Ways and Means Chairman Dave Camp, R-Mich., issued earlier this year.
 
The health panel met on June 5 to discuss the draft and address some remaining loose ends. One such question that still needs answering: how they plan to cover the not-insignificant cost of SGR reform.
 
Because of a drop in Medicare spending, the cost of a permanent fix is the lowest it’s been in years, according to the Congressional Budget Office. But Congress must figure out a way to cover the estimated $140 billion the reform will cost.
 
“We intend to avoid the error – made in years past – of discussing how to pay for reform before the policy is developed,” Upton asserted in his opening statement to the June 5 hearing. “But make no mistake: SGR reform will be offset with a real and responsible pay-for when it comes to the floor of the House of Representatives for a vote.”
 
Both Upton and Pitts described their intent to work across the aisle for a bipartisan solution to the SGR, but their proposed legislation is already drawing criticism from Rep. Allyson Schwartz, D-Pa., who issued her own bill in February to replace the SGR payment formula.
 
Speaking to Modern Healthcare, she criticized the Upton/Pitts bill for not departing enough from the current payment formula. “It is disappointing because while it recognizes and uses the terminology about moving away from fee for service towards a system that rewards quality over volume, it really doesn't do that,” Schwartz told the publication. “It actually takes fee-for-service, maintains fee-for-service as the norm and slightly modifies it.”
 
At the June 5 meeting, the House panel heard from physicians and health care executives about the best quality measurement methods and alternative pay structures, among other topics.
 
You can be sure Part B News will stay on top of the SGR issue.