Senate Passes Historic SGR Repeal

On Tuesday evening, the Senate passed the Medicare Access and CHIP Reauthorization Act (H.R. 2), thus permanently repealing the flawed sustainable growth rate (SGR) formula. The Senate ushered this legislation through with a vote of 92–8, marking the end of nearly 13 years of debate and 17 temporary patches blocking implementation of the SGR formula.

The House passed H.R. 2 in late March, with the Senate promising to review the measure after its two-week spring recess. Tuesday’s Senate vote comes on the eve of the April 15 deadline when the Centers for Medicare and Medicaid Services (CMS) would begin to apply the scheduled 21 percent negative update to reimbursement payments for providers.

The Senate voted not to adopt any of the six amendments proposed to H.R. 2, meaning that the SGR repeal will now go straight to the President for signature. The bill replaces the SGR with a 0.5 percent increase in Medicare reimbursement beginning July 2015 and extending through December 2015. This 0.5 percent update will continue annually from 2016–2019.

H.R. 2 marks a transition from a fee-for-service to a value-based payment system for all Medicare providers. In the next few weeks, the Academy will be analyzing the legislation and will keep our members informed regarding its implementation. H.R. 2 also reauthorizes the Children’s Health Insurance Program (CHIP) for two years and contains an extension of certain expiring provisions in Medicare, such as payment for therapy services, pediatric quality measures, and diabetes programs.