Bill to Repeal Medicare SGR Physician Payment Formula Moves Forward-What This Could Mean for Physicians’ Payments

Friday, July 26, 2013
By Lance O. Leider, J.D., The Health Law Firm and George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

On July 23, 2013, the House Energy and Commerce Health Subcommittee approved a proposal to repeal Medicare’s sustainable growth rate (SGR) physician payment formula in lieu of a system that rewards doctors for high quality care. The Subcommittee on Health passed the bill, which could be the start of a permanent fix for physician payments, according to The Hill.

Under the current SGR system, physician payments are threatened every year. Congress has annually intervened and provided temporary fixes to avoid payment cuts to physicians. According to The Hill, physicians face a nearly twenty-five percent (25%) cut in Medicare payments starting in 2014, unless Congress acts by then.

To read the entire article from The Hill, click here.

Details of the Bill.

The bill starts with repealing the SGR physician payment formula and providing five years of stable Medicare payments beginning in 2014. Reimbursements would grow one half percent (1/2%) for each year between 2014 and 2018.

Starting in 2019, physicians can choose to report certain quality measures and have traditional fee-for-service payments adjusted based on how doctors compare to peers on those measures. Physicians can receive a one percent (1%) bonus if they perform well and receive a one percent (1%) penalty in payments if they don’t.

Physicians may opt out of this quality-incentive program if they participate in a similar payment model such as a patient-centered medical home, accountable care organization, or some undetermined model.

Physicians who decline to report their quality data or participate in an alternative model will received a three percent (3%) cut in payments starting in 2019.

Specific Concerns Raised by Medical Societies.

According to MedPage Today, 20 medical societies support the bill and have stated it is a good transition away from the SGR model. However, it is also agreed upon that the bill needs work before a final bill is signed into law.

For example, the American Academy of Family Physicians (AAFP) dislikes how Medicare’s pay raises don’t give primary care providers more money. Groups also raised concerns about the quality measures that are used in determining the bonuses and penalties starting in 2019. According to MedPage Today, the Association of American Medical Colleges (AAMC) states that it would like to have those measures risk-adjusted for socioeconomic status to account for the variety of patients. Also, the bill does not cover how to pay for the nearly $139 billion repeal of the SGR.

Click here to read the entire MedPage Today article.

Check Our Blog for the Latest Developments.

The bill is expected to pass the full Energy and Commerce Committee of the House of Representatives before Congress begins its recess in August. However it is unlikely the bill will reach a floor vote in the next two weeks.

Be sure to check our website regularly for any updates to this blog.

Contact Health Law Attorneys Experienced in Representing Health Care Professionals.

The Health Law Firm routinely represents pharmacists, pharmacies, physicians, nurses and other health providers in investigations, regulatory matters, licensing issues, litigation, inspections and audits involving the Drug Enforcement Administration (DEA), Federal Bureau of Investigation (FBI), Department of Health (DOH) and other law enforcement agencies. Its attorneys include those who are board certified by The Florida Bar in Health Law as well as licensed health professionals who are also attorneys.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at


What do you think about the possible repeal of SGR physician payment formula? What are your thoughts on the new proposed bill? Please leave any thoughtful comments below.


Feigl, Charles. “Medicare SGR Repeal Bill Advances in House.” American Medical News. (July 22, 2013). From:

Pittman, David. “SGR Repeal Bill Gains Broad Support.” MedPage Today. (July 23, 20013). From:

Viebeck, Elise. “Key House Subcommittee Advances Permanent ‘Doc Fix.’” The Hill. (July 23, 2013). From:

About the Authors: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area.  The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone:  (407) 331-6620.

George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law. He is the President and Managing Partner of The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area. The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

Tag Words: Medicare, Medicare sustainable growth rate, SGR, physician, doctor, physician pay, fee-for-service, Medicare reimbursement system, repeal of SGR, quality care reimbursement, physician pay cut, doctor pay cut, Medicare pay formula, volume based fee for service, defense attorney, defense lawyer, physician attorney, physician lawyer, The Health Law Firm, Florida health law firm

"The Health Law Firm" is a registered fictitious business name of George F. Indest III, P.A. - The Health Law Firm, a Florida professional service corporation, since 1999.
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