And how would you like to pay for that?

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 - Evan headshot 2013
Evan Godt, Editorial Director

Optimism ran high in healthcare circles on Thursday as lawmakers announced a deal had been reached in the ongoing saga to repeal the flawed Sustainable Growth Rate (SGR) formula.

The SGR formula, which is used when calculating Medicare physician payment, has been patched repeatedly over the last decade in order to head off what would be disastrous cuts. The current patch is set to expire on March 31 st and would result in a 24 percent cut to physician payments if no action is taken.

Thursday’s deal would repeal the SGR and replace it with annual payment updates of 0.5 percent for five years. It would also consolidate a few Medicare quality reporting programs and incentivize physicians to move to an alternative payment model or patient-centered medical home. Starting in 2018, the deal would provide a 5 percent bonus to physicians who receive at least 25 percent of their Medicare revenue from an alternative payment model, with that 25 percent threshold set to increase over time.  

But while news that the deal had passed from committee and was advancing to both chambers of Congress got #SGR trending on Twitter in Washington, D.C., some pointed out one big omission: the deal doesn’t specify how the fix would be paid for.

For a budget-obsessed legislature, this will be a big hurdle as the cost of the agreement was pegged at approximately $126 billion over 10 years. Some lawmakers acknowledged this on Thursday, including Rep. Joe Pitts (R-Pa.), chairman of the Energy and Commerce Health Subcommittee.

“We only have agreement on policy,” said Pitts in the statement. “We still have to figure out how to pay for it, and I am under no illusions about how difficult that may be. We are going to do our best. We've already done more than most people thought was possible."

Any movement on repealing the SGR formula is reason to celebrate, but for an agreement on the thorny issue of paying for the fix, the refrain remains the same: wait and see.

-Evan Godt
Editor – Health Imaging