CHA News Article

Two-Day Hearing on SGR Reform Explores Pay-for Options
Full repeal of SGR estimated to cost $140 billion

The House Energy and Commerce Committee held a two-day hearing this week to explore a permanent solution to the flawed sustainable growth rate (SGR) formula for Medicare physician reimbursement. The hearing was intended to build on the work of the 113th Congress, which approved legislation that would replace the SGR with new payment systems over the next several years. The legislation, H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act, was passed in 2014 without an offset to pay for the estimated $140 billion cost of the bill. While all witnesses agreed that reform is necessary, there is disagreement about how to pay for the SGR repeal.

Rich Umbdenstock, President and CEO of the American Hospital Association (AHA), urged the committee to find a payment mechanism that would not come at the expense of other health care providers. Additional payment cuts to hospitals could jeopardize access to high-quality, innovative and efficient care to beneficiaries. AHA submitted to the committee its 2012 report, Ensuring a Healthier Tomorrow: Actions to Strengthen Our Health Care System and Our Nation’s Finances, which describes a number of areas where Congress could find health care savings to pay for the SGR repeal. AHA’s written testimony and report are available on the committee’s website. CHA will continue to work closely with the California members of the committee as legislation is developed in the 114th Congress.