Sustainable Growth Rate Reform: An Indication of the Broad Strategic Intent of CMS

Ken Perez
Ken Perez

Guest post by Ken Perez, vice president of healthcare policy, Omnicell.

Years ago, I worked in a business unit of a large technology company that was involved in mergers, acquisitions and partnerships. In the course of our work, even when some proposed deals would fall through and some partnerships would not come together, the strategic intent of the company remained clear to us. It was like a beacon that we kept pursuing no matter what.

With healthcare-related legislation, all too often we can lose sight of the strategic intent of CMS. We immerse ourselves in the debate over details, but often fail to step back and reflect on the “end game” that one can hang their hat on. What is CMS signaling to healthcare providers?

Currently, there is bipartisan and bicameral support for permanent repeal of the unpopular, annually overridden sustainable growth rate (SGR) provision, a formulaic approach intended to restrain the growth of Medicare spending on physician services. The SGR threatens to impose a 24.4 percent reduction to the Medicare physician fee schedule (PFS) effective April 1, 2014.

Lawmakers from the House Ways and Means, House Energy and Commerce, and Senate Finance committees have worked together to consolidate separate bills that their respective committees passed toward the end of 2013. The result is H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, which was introduced by Rep. Michael C. Burgess, a Texas Republican and physician on Jan. 6, 2014.

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