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SGR Repeal Stalled, House Amendment Would Delay Individual Mandate

Healthcare providers and policy analysts who thought Congress would finally eliminate the Medicare Sustainable Growth Rate (SGR) mechanism had their hopes dashed on Friday, March 14 when U.S. House of Representatives voted to fund such a move by delaying tax penalties for not being insured as called for in the Patient Protection and Affordable Care Act.

The House approved by a 238-181 margin an amended version of the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (H.R. 4015). H.R. 4015 repeals the current sustainable growth rate formula and replaces it with a permanent solution to address physician payments in the Medicare program.

The amendment stipulates that no American would pay a penalty tax for failure to obtain government-approved health insurance — known as the individual mandate — until 2019. Dave Camp, Chairman of the House Ways and Means Committee, authored the amendment.

Congressman Camp (R-Midland) made the following statement after the House passed permanent repeal of the physician payment fix, paid for by delaying ObamaCare's individual mandate penalty for five years.

"The President, realizing the failures of his healthcare law, has repeatedly delayed and exempted certain individuals, labor unions and businesses from the law's mandates and penalties. Just today, there is news the Administration may grant another extension for certain individuals in their law. If the President is willing to give relief to some, he and Democrats in Congress should be willing to give all Americans a reprieve from ObamaCare. It is only fair."

The nonpartisan Congressional Budget Office estimated this week that this move would increase the number of uninsured Americans by about 13 million in 2018. In a budget-tight Congress that deals with many healthcare interests, paying for an SGR repeal is the most significant hurdle to clear.

Now, progress for reforming the troublesome physician payment mechanism may have been brought to a grinding halt because of the linkage of the mandate delay to the SGR bill. Earlier this month, President Barak Obama threatened to veto the bill if it contains the mandate delay.

Absent a resolution to the Sustainable Growth Rate mechanism, Medicare doctors face a 24% reimbursement cut on April 1. H.R. 4015, in its original form, would permanently repeal the SGR formula and provide physicians with a 0.5% pay increase for five years while alternative payment models based on incentives and value-based care phase in.

Current "bridge" legislation, signed by President Obama in January, prevents the SGR pay cut from going into effect until March 31.

While many view the amendment as political maneuvering, the American Medical Association released a statement encouraging continued bi-partisan efforts on behalf of healthcare providers and consumers:

"Just last month, both parties worked in a bicameral process to develop good-faith consensus and were historically close to repealing the dysfunctional payment system and improving healthcare for America's senior citizens. It would be a shame for lawmakers to have done all of that hard work only to have it overcome by partisan politics over budgetary issues," stated Ardis Dee Hoven, M.D., President of the AMA.

"AMA will continue to work with Congressional leaders to get us to the finish line in enacting a solution based on a framework that both chambers and the President can accept. Continuing the cycle of kicking the can down the road through temporary patches in the months ahead simply wastes more taxpayer money to preserve a bad policy of Congress' own making."

Congress will return from a weeklong recess on March 24, which gives lawmakers one week until the temporary SGR patch expires on March 31.


Track H.R. 4015 on GovTrack

AMA Resource on SGR and Implications (PDF)

AMA Newsroom

David Camp Media

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