House Budget Chairman Tells AMA Short-Term SGR Patch Likely by March 31

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By Nathaniel Weixel

Feb. 24 — House Budget Committee Chairman Tom Price (R-Ga.) told the American Medical Association Feb. 24 that a four- to six-month patch of Medicare's sustainable growth rate formula is likely by the March 31 expiration of the current patch.

Price said he doesn't think there's enough time for lawmakers to get a full repeal passed by the deadline. Instead, Price said he thinks a full repeal of the physician payment system is likely by the end of the fiscal year (Sept. 30), and that it will be tied to extending funding for the Children's Health Insurance Program, which expires at the end of FY 2015.

Price didn't say how the patch would be paid for or what Medicare policy extenders would be included, but he assured the AMA that it wouldn't be funded at the expense of physicians.

“I'm hopeful that we will be able to do it [a permanent repeal] this year,” Price said. “I don't say next month because I think it's important to be candid and honest. We've kicked the can down the road so many times on this that our muscle memory is just to kick the can down the road, so that is likely what we will do in March.”

Bipartisan Support

Price noted that many lawmakers support the policies included in the bipartisan, bicameral legislation that passed the House in 2014, the proposed SGR Repeal and Medicare Provider Payment Modernization Act (H.R. 4015, S. 2000). There is still bipartisan agreement that the SGR needs to be repealed, but Price said time is running out for a permanent fix to be done by the deadline.

A short-term patch is likely “not because there isn't a unified sense that it needs to be repealed, not because we don't think the policy that was agreed to last year was a step in the right direction, but because of the events that are pushing up against us and the amount of resources that are necessary in order to pay for a repeal of SGR. I don't think it can be done in the 12 or 15 legislative days we have left,” Price said.

Also speaking at the AMA meeting, Health and Human Services Secretary Sylvia Mathews Burwell said permanently repealing the SGR is a priority of the administration. Burwell highlighted that the administration's FY 2016 budget proposal calls for replacing Medicare's sustainable growth rate (SGR) formula with one that promotes new physician payment models and more efficient delivery of care.

Lack of Specifics

Price said he was heartened to hear Burwell speak about the need to pass a permanent fix, but said she needs to offer specifics on how to pay for it. The Congressional Budget Office Feb. 2 said replacing the SGR would cost $174.5 billion from 2015 to 2025.

Price, however, didn't offer any specifics of his own. “We spend $3.6 trillion a year in this town, so to come up with a pay-for ought to be relatively easy,” he said.

Drug Savings for Beneficiaries

Aside from the SGR, Burwell announced that Medicare beneficiaries have saved $15 billion on prescription drugs since the Affordable Care Act was signed in 2010.

According to agency figures, nearly 5.1 million Medicare beneficiaries saved $4.8 billion in 2014 alone, or an average of $941 per beneficiary. These figures are higher than in 2013, when 4.3 million saved $3.9 billion, for an average of $911 per beneficiary.

The ACA makes Medicare prescription drug coverage more affordable by gradually closing the gap in coverage where beneficiaries had to pay the full cost of their prescriptions out of pocket, before catastrophic coverage for prescriptions took effect, the HHS said. That gap in coverage is known as the “doughnut hole.” The agency said the doughnut hole will be closed by 2020, marking 2015 as the halfway point.

The HHS said people with Medicare Part D who fall into the doughnut hole in 2015 will receive discounts and savings of 55 percent on the cost of brand-name drugs and 35 percent on the cost of generic drugs.

Burwell also said more beneficiaries are taking advantage of wellness exams and other preventive services under the ACA. An estimated 39 million people with Medicare (including those enrolled in Medicare Advantage) took advantage of at least one free preventive service in 2014, Burwell said, up from 37.2 million in 2013.

To contact the reporter on this story: Nathaniel Weixel in Washington at nweixel@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com