Congress Passes a One-Year Fix to the Sustainable Growth Rate (SGR)

December 13, 2010

Congress Passes a One-Year Fix to the Sustainable Growth Rate (SGR)

A bill that will provide a one-year extension to the Medicare physician payment rates was passed by the Senate late Wednesday, December 8th and by the House on Thursday, December 9th.  The bill effectively blocks a 25 percent decrease in payments from taking effect on January 1, 2011.

The measure was introduced in the Senate by Finance Committee Chairman Max Baucus (D-MT) and ranking member Charles Grassley (R-IA) after an agreement was reached with Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY).  Senators Reid and McConnell had vowed to develop a plan for a one-year fix and introduce it before the end of the term.

The bill will be paid for by recouping money from a fund set up in the Health Care Reform Act to provide subsidies to help individuals purchase health insurance through the state benefit exchanges. The measure will also extend some expiring Medicare payment provisions including a cap on therapy services, hospital geographic reclassifications, and the Transitional Medical Assistance program.

President Obama released a statement Wednesday, calling the measure "an important step forward to stabilize Medicare," but called for a permanent solution from Congress in the next year.  The President is expected to sign the bill as early as today.