2013 Annual Report: AAO-HNS Engages Congress: SGR Repeal and Payment Reform
The SGR Roller Coaster Ride 2013 was supposed to be “the year” – the year that Congress would finally, and permanently, repeal the flawed Sustainable Growth Rate (SGR) formula used to calculate physician payments under the Medicare program. However, the momentum for repeal ultimately adhered to a rollercoaster-style ebb and flow, with the final outcome regarding passage of SGR-repeal legislation still unknown at the writing of this article. In February, the Congressional Budget Office (CBO) issued a report lowering its projected cost of repealing the SGR formula to $138 billion. As a result, repeal of the SGR, an annually perplexing issue for Congress, was essentially deemed “on sale.” Soon thereafter, the Health Subcommittee of the House Energy & Commerce (E&C) Committee held a hearing to discuss the viability of possible new payment models. While hearings on this subject are not out of the ordinary, its scheduling so early in the legislative year was promising. In the months that followed, physician leaders from 3P and the Ad Hoc Payment Model workgroup, along with staff from the AAO-HNS Health Policy and Government Affairs Business Units, participated in an ongoing dialogue with Committee staff in an effort to develop legislation that would incentivize the delivery of high-quality and efficient healthcare. As part of this effort, the AAO-HNS prepared and submitted five formal comment letters to Congressional Committees. These letters specifically discussed the positive and negative aspects of the proposed framework for SGR repeal, as it related to otolaryngology–head and neck surgery. The letters are available for review at www.entnet.org/advocacy. In July, legislation (H.R. 2810) was formally introduced in the U.S. House of Representatives and was soon unanimously (51-0) passed by the E&C Committee. During the August recess period, lawmakers were to begin the process of identifying “offsets” to finance SGR repeal. However, broader issues like passage of a “Continuing Resolution” to the fund the government and a required increase in the debt ceiling, soon began to overshadow targeted pieces of legislation like H.R 2810. Throughout the fall, those same issues plagued Capitol Hill, and resulted in the first government shutdown in almost twenty years. As a result, many in the physician community began to speculate that the ongoing ideological divide would hamper any additional efforts to advance permanent SGR legislation by year’s end. However, by late October the SGR issue reemerged at the forefront of Congressional talks, as the Senate Finance and House Ways & Means Committees released a new (and bipartisan) framework to repeal the SGR and replace it with a new payment system designed to emphasize and reward “value” and transition away from a “volume”-based system. Despite a general coalescence by lawmakers in regard to the “policy” to repeal/replace the SGR, the last, and perhaps greatest, barrier to passage of pending SGR legislation is the identification of the necessary “offsets” to finance the effort. If Congress fails to act in any regard, physicians face a 24.4 percent cut in Medicare physician payments on January 1, 2014.
The SGR Roller Coaster Ride
2013 was supposed to be “the year” – the year that Congress would finally, and permanently, repeal the flawed Sustainable Growth Rate (SGR) formula used to calculate physician payments under the Medicare program. However, the momentum for repeal ultimately adhered to a rollercoaster-style ebb and flow, with the final outcome regarding passage of SGR-repeal legislation still unknown at the writing of this article.
In February, the Congressional Budget Office (CBO) issued a report lowering its projected cost of repealing the SGR formula to $138 billion. As a result, repeal of the SGR, an annually perplexing issue for Congress, was essentially deemed “on sale.” Soon thereafter, the Health Subcommittee of the House Energy & Commerce (E&C) Committee held a hearing to discuss the viability of possible new payment models. While hearings on this subject are not out of the ordinary, its scheduling so early in the legislative year was promising.
In the months that followed, physician leaders from 3P and the Ad Hoc Payment Model workgroup, along with staff from the AAO-HNS Health Policy and Government Affairs Business Units, participated in an ongoing dialogue with Committee staff in an effort to develop legislation that would incentivize the delivery of high-quality and efficient healthcare. As part of this effort, the AAO-HNS prepared and submitted five formal comment letters to Congressional Committees. These letters specifically discussed the positive and negative aspects of the proposed framework for SGR repeal, as it related to otolaryngology–head and neck surgery. The letters are available for review at www.entnet.org/advocacy.
In July, legislation (H.R. 2810) was formally introduced in the U.S. House of Representatives and was soon unanimously (51-0) passed by the E&C Committee. During the August recess period, lawmakers were to begin the process of identifying “offsets” to finance SGR repeal. However, broader issues like passage of a “Continuing Resolution” to the fund the government and a required increase in the debt ceiling, soon began to overshadow targeted pieces of legislation like H.R 2810.
Throughout the fall, those same issues plagued Capitol Hill, and resulted in the first government shutdown in almost twenty years. As a result, many in the physician community began to speculate that the ongoing ideological divide would hamper any additional efforts to advance permanent SGR legislation by year’s end.
However, by late October the SGR issue reemerged at the forefront of Congressional talks, as the Senate Finance and House Ways & Means Committees released a new (and bipartisan) framework to repeal the SGR and replace it with a new payment system designed to emphasize and reward “value” and transition away from a “volume”-based system. Despite a general coalescence by lawmakers in regard to the “policy” to repeal/replace the SGR, the last, and perhaps greatest, barrier to passage of pending SGR legislation is the identification of the necessary “offsets” to finance the effort. If Congress fails to act in any regard, physicians face a 24.4 percent cut in Medicare physician payments on January 1, 2014.