Bipartisan Plan for SGR Repeal Released

Friday, February 14, 2014
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

After months of negotiations on how to revise Medicare's payment system for physicians, the bipartisan team of Senate and House committees have reached a deal on the policy. On February 6, 2014, lawmakers unveiled the agreement to repeal Medicare's sustainable growth rate (SGR). The legislation replaces the SGR with a system that would provide stable payment updates for five years and shift Medicare to a system based on quality care versus quantity care.

To read a summary of the bill, click here.

The bill, called the SGR Repeal and Medicare Provider Payment Modernization Act, still needs approval from both chambers. The next task is to outline how Congress will pay for a full repeal, which could cost between $120 and $150 billion.

Details of the Bill.

The language of the deal lawmakers announced February 6, 2014, will be pretty close to the one signed into law, if this bill reaches that point.

According to MedPage Today, physicians will get a 0.5% pay increase each year for five years. This is designed to provide payment stability and help physicians transition to new models of care.  Among the provisions of the new system outlined by lawmakers are:

-  Consolidation of existing payment incentive programs into a single value-based
performance incentive program, in which high-performing professionals would earn payment increases;
-  Incentivized care coordination efforts for patients with chronic care needs;
-  Payment data on providers becomes more publicly available;
-  Implementation of a process to re-base misvalued codes; and
-  Development of quality measures in close collaboration with physicians.

The bill also provides a 5% bonus to physicians who receive at least 25% of their Medicare revenue from an alternative payment model in 2018. These alternative payment models include accountable care organizations (ACOs), patient-centered medical homes, and others. The 25% threshold increases over time. To read the entire article from MedPage Today, click here.

Eliminating the SGR.

The SGR was established in 1997, according to Modern Healthcare, to control physician spending, but since 2003, Congress has spent about $150 billion to provide short-term fixes to spare physicians from a huge Medicare payment cut each year. If Congress passes legislation to permanently eliminate the SGR, Medicare-participating physicians would avert the nearly 24% payment cut scheduled for April 1, 2014. To read the entire article from Modern Healthcare, click here.

Still to come are details on how lawmakers would cover the agreement's cost to repeal and replace the SGR.

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.


Carey, Mary Agnes. "Hill Plan Would Reward Medicare Doctors For Quality." Kaiser Health News. (February 7, 2014). From:

Zigmond, Jessica. "Bipartisan Plan Calls for SGR Repeal, Replaced by Payment Updates, Value Based Care." Modern Healthcare. (February 6, 2014). From:

Pittman, David. "SGR Fix: No Pay Cut!" MedPage Today. (February 6, 2014). 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, growth rate formula, sustainable growth formula, sustainable growth model, Medicare payment system, physician, doctor, physician pay, fee-for-service, Medicare reimbursement system, Medicare reimbursement, 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, health law firm, 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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