On December 12, 2013, the Senate Finance Committee joined the House Ways and Means Committee in passing legislation correcting a decade-long problem that has created uncertainty for millions of Medicare providers and patients by repealing a broken payment formula and replacing it with a smarter approach that rewards quality health care over quantity.

Yearly Temporary Fixes

Since 2002, the Sustainable Growth Rate (SGR) formula has threatened to make draconian cuts to physician payments – cuts that could cause seniors to lose access to their doctors. Every year, Congress has had to spend more time and money to pass temporary fixes called “extenders.”

Permanent Solution

Passage of December’s bill shows overwhelming bipartisan support to repeal the broken SGR payment formula and replace it with a smarter approach that rewards quality health care over quantity.

The legislation is aimed at:

  • Repealing the SGR update mechanism and tying payments to quality and efficiency
  • Improving the fee-for-service system by streamlining Medicare’s existing web of quality programs into one value-based performance program
  • Ensuring accurate payments for services, and encouraging physicians to adopt proven practices
  • Incentivizing movement to alternative payment models to encourage doctors and providers to focus more on coordination and prevention, to improve quality and reduce costs
  • Making Medicare more transparent by giving patients more access to information and doctors data that they can use to improve care

As this legislation moves out of Committee and onto the floor, legislators need to continue to work together to ensure that this smart policy becomes law and it doesn’t add to the nation’s debt.