December 12, 2013
5 min read

Senate Finance Committee votes to repeal Medicare SGR formula

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The US Senate Finance Committee has approved a draft bill to repeal Medicare's Sustained Growth Rate (SGR) formula for physician payments.

Similar legislation is being considered by the US House Ways and Means Committee. The draft bills include recent revisions to the SGR formula that the American Medical Association considers "a significant improvement over current law ... [that] will result in a stronger Medicare program for both patients and physicians."

Both versions of the proposal would, according to the AMA, consolidate and restructure existing quality improvement incentive programs - including meaningful use of electronic health records, the Physician Quality Reporting System and the value-based modifier - to reduce the administrative and financial burden on physicians.

The following comments were made by Senate Finance Committee members during Thursday's discussion and review of potential amendments.

2:55 p.m. - The SGR reform measure passes on a voice vote of Senate Finance Committee members.

2:25 p.m. - Sen. Michael F. Bennet (D-Colo.): "Every year, every Amerian has access to information about their Social Security benefits. This amendment ... facilitates a greater understanding of the Medicare program. Most Americans have no idea what they contribute or what they receive in benefits. It is important for people to understand (that on average they receive more in Medicare benefits than they pay in)."

2:17 p.m. - Sen. Max Baucus (D-Mont.): "I think that's a bit much. I don't think we can include it in the patch. I think the appropriate process is to sit down and find some way to accommodate your wishes. But I can't make a commitment now to make it part of the patch. (Portman agrees to withdraw health care tax credit amendment).

2:16 p.m.  - Sen. Rob Portman (R-Ohio): "It does end Jan. 1 and these families will experience a gap in their coverage." (asks for amendment to be included in the measure).

2:14 p.m. - Sen. Max Baucus (D-Mont.): "I would suggest that the senator withdraw the amendment. It's not germane to the subject before us."

2:12 p.m. - Sen. Rob Portman (R-Ohio): "The health care tax credit amendment is a vital tool for Americans trying to pay for their health insurance. For a lot of users of this program, they depend on this credit to help pay for their health care."

2:04 p.m. - Sen. Ron Wyden (D-Ore.): "We spend $4 billion a year on annual physicals for senior citizens. But after that, nothing much happens; after annual physicals [more should be done] to maximize the value of prevention."

1:53 p.m. - Sen. John Thune (R-S.D.): "The medicare program is not keeping up with technology. It can help prevent costly hospital admissions and re-admissions. This amendment would create a pilot program ... and is designed to be budget-neutral. I would ask HHS to establish a formal mechanism" ... to evaluate these telehealth programs. 

1:47 p.m. - Sen. Chuck Grassley (R-Iowa): "We should fight to preserve every dollar going into rural areas. It's no secret that the House wants to cut rural policies even further. We need to speak strongly in favor of rural providers right now. The Ways and Means Committee just added 3 years of fee updates to its bill. We should use a proven rural mechanism."

1:44 p.m. - Sen. Michael D. Enzi: (R-Wyo.): "More media reports show that physicians are selling their practices ... Medicare is the largest single purchaser of health care in this country. Many CMS rules and regulations are changed after the stock market closes. We need to understand how Medicare payment policies will affect [this issue]."

1:42 p.m. - Committee reconvenes.

1:05 p.m. - Recess.

12:58 p.m. - Sen. Michael F. Bennet (D-Colo.): "Many of us come from states that are finding ways to innovate across the private and public sectors. Outside of Washington, reasonable people can come to reasonable bipartisan solutions. We ought to be open to ways that not everything needs to be run from Washington, D.C."

12:54 p.m. - Sen. Chuck Grassley (R-Iowa): Low-volume hospitals are critical to the community. I have serious concerns that the cuts proposed will critically impact low-volume [rural] hospitals."

12:37 p.m. - Sen. Richard Burr (D-N.C.) : "It's important, but it's not funded. Assume my skepticism to be in concept. Without understanding with great texture, it's impossible for me to know how that's incorporated into a Medicare system. Therefore I will oppose the amendment."

12:32 p.m. - Sen. Debbie Stabenow: (D-Mich.): On a provision for mental health services: "The majority of people who have mental illness will leave long an fruitful lives if they get the care they need (citing Sandy Hook school shootings and recent incident involving woman who drove a car toward the Capitol and was shot by guards). We can do better than that. We have veterans committing suicide every day in America. We're really saying we're going to treat illness above the neck equal to those below the neck."

(Various senators describe and withdraw amendments)

12:22 p.m. - Sen. Robert Menendez (D-N.J.): "I want to raise an issue [about] clinical laboratory tests ... they represent only 2% of Medicare spending. But I hope we can continue to work on legislation that protects and advances clinical laboratories."


Robert Menendez

2:55 p.m. - The SGR reform proposal passes on a voice vote of the committe.

12:20 p.m. - Sen. John Thune (R-S.D.): "2017 is the best year to require interoperability. I believe a significant barrier are the EHR systems that block data across vendor platforms."

12:15: p.m. - Sen. Pat Roberts (R-Kan.): "Medication therapy management has been shown to be an incredibly successful program ... for chronic conditions. It improves quality and saves the system money. Our amendment would expand this to individuals with a single chronic condition."

12:10 p.m. - Sen. Ron Wyden (D-Ore.): This represents "The first real steps to an improved approach to treating those with chronic diseases. We have put in place a number of reforms that are going to make this much more attractive to seniors and high performing plans. We need a coordinated team, not something that is layered on top. This program would not have the attribution rule that keeps organizations from specializing in people with only certain chronic conditions. This is the area that is going to drive Medicare for decades to come."

11:40 a.m. Session resumes. Amendments listed for consideration.

11:08 a.m. - Recess.

11:02 a.m. - Sen. Rob Portman (R-Ohio): "We're not hitting the big issues of Obamacare and the effect on our constituents. We're not going to be able to support this [SGR reform] at the end of the day unless it has a pay-for."

10:55 a.m. - Sen. Mike Crapo (R-Idaho): "We need to take much more agressive and broader action" for more complete Medicare reform. "Although I commend you for this progress on the SGR, I encourage you to take the same approach to solving the broader aspects of Medicare reform in regard to tax reform."

10:49 a.m. - Sen. Ron Wyden (D-Ore.): "Chronic disease, this is what Medicare is going to be all about. This is responsible for 80%-plus of spending."

10:42 a.m. - Sen. Maria Cantwell (D-Wash.): "We need to promote certainty and stability for Medicare providers and patients. I need to make sure innovation is preserved. We need to make sure we're getting off of fee-for-service models ... we want to keep moving forward ... to keep innovators on a forward march."

10:39 a.m. - Sen. John Cornyn (R-Texas): "Let me raise a concern I have about physicians in rural areas. We need to ensure they have ability to transition to alternative payment models. It's critical we solve the SGR problem."


Charles E. Schumer

10:37 a.m. - Sen. Charles E. Schumer (D-NY): "I really hope we can make this happen."

10:23 a.m. - Sen. Orrin Hatch (R-Utah): "This legislation represents almost a year of hard work on both sides of the aisle. Since 2001, we've had to patch the SGR 15 times. A number of these (medical) associations have already expressed their support for the legislation. It is essential that we accomplish this first step today."

10:15 a.m. - Senate Finance Committee executive session is called to order by Chairman Max Baucus (D-Mont.) "Enough is enough for Band-Aid solutions. It is time to act. Finally, not a 1-year patch (committee members cheer). Our bill reflects input from the entire medical community. We all share the same goal."