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SGR Update – 3/3/15

As the deadline for Congressional action to prevent a massive (21%) cut in physician fee schedule payment approaches (March 31st) we thought we would take this opportunity to update you on where things stand in terms of enactment of a long-term vs. short-term SGR fix.

During a recent speech before the Federation of American Hospitals (FAH), Representative Kevin McCarthy (R-CA) and Rep. Paul Ryan (R-WI) said that an SGR fix was “within reach” this year but that it wouldn’t get done by the time the current “patch” expires on March 31st.

McCarthy is the House Majority Leader and Ryan is Chairman of the Ways and Means Committee.  This Committee has principle jurisdiction over the Medicare program for the House of Representatives.

Also, based upon a number of conversations HBMA staff have had with Congressional staff and statements made by other Members of Congress, it looks as though the most likely “pay for,” for an SGR patch extension will be to add another year to Medicare sequestration.  As you know, the 2% Medicare sequestration is currently projected to expire at the end of 2024.  By adding a year on the back end (extending until 2025), results in about $5 Billion dollars in “savings” to the Medicare program. This is nearly enough to offset the cost of another temporary SGR fix.  It is not clear whether the temporary fix will include a modest increase (.5%) in the Conversion Factor (CF).

The most likely scenario at this point is that between now and March 31st, Congress will adopt a short-term SGR patch to give the House and Senate additional time to identify the offsets necessary to “pay for” an SGR fix.  HBMA has consistently urged Congress to adopt an SGR fix (whether short-term or long-term) well in advance of the deadline.  This way, we can avoid any delays in payment or the need to refile claims because Congress failed to enact an SGR fix in time.  HBMA will continue to advocate for adoption of an SGR fix well in advance of the deadline.

Finally, we want to say that there continues to be broad bi-partisan agreement on what should replace the SGR but there is no agreement on how to pay for the replacement.  The “pay for” has been and continues to be the stumbling block.  Both McCarthy and Ryan expressed optimism that they could find the necessary offsets this year but gave no indication of just where those savings would come from.  Most hospitals feel that a significant amount of the offset will come from hospital payments.

Please feel free to contact the HBMA Government Relations Committee should you have any questions.

The Healthcare Billing & Management Association (HBMA) is a member-led trade association committed to the education of medical billers and promotion of high ethical and professional standards within the industry. HBMA also advocates and educates legislative stakeholders and federal agencies to improve the business of medical billing and the practice of healthcare. HBMA members manage claims on behalf of hospital-based physicians, physician practices and other providers, and represent more than 30,000 individuals and over 600 companies. To learn more about HBMA, please visit

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