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Congress debating SGR repeal during current lame-duck session

Repeal of Medicare’s sustainable growth rate (SGR) is one of the topics being debated by members of Congress, who returned to work last week for a lame-duck session expected to last just a few weeks.

The SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (H.R. 4015/S. 2000) is the result of more than a year of bipartisan and bicameral work by the House Committees on Ways and Means and Energy and Commerce and the Senate Committee on Finance. There has been broad support of the SGR policy provisions included in the bill, but the stumbling block has been how to pay for it. The Congressional Budget Office recently re-estimated the cost for the bill at $144 billion. A number of Republican members of Congress are now talking about fixing the SGR without “pay-fors,” but without support from leadership and other members of the caucus, the likely scenario is that Congress defers action until next year.

If Congress delays action, new committee leadership will have to achieve consensus on new legislation before the 17th SGR patch expires on March 31, 2015. Without action before that deadline, another patch will likely be necessary to avoid physician payment cuts. An 18th patch covering April 2015 through the end of the year, including extenders, would cost nearly $20 billion. Current Congressional Budget Office estimates for just the repeal—approximately $119 billion over 10 years—are historically low. However, the unpredictable and frequently inexplicable variations in SGR estimates mean the costs could go up at any time.

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