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The SGR: Here We Go Again … !

On the heels of one of the most maddening congressional sessions in history, angry yet determined CMA physician leaders will return to Washington, DC, to once again push Congress to pass the bipartisan, bicameral Medicare SGR repeal and payment reform legislation.

This last Congress has been appropriately labeled “The Worst Congress Ever” for their permanent state of acrimony and lack of productivity, which has brought them, the Medicare program, and even the United States government to the brink of collapse. Thomas Mann and Norman Ornstein, well-respected congressional scholars, have opined that they have been studying Washington for more than 40 years and have never seen it this dysfunctional. This proclamation is from their book It’s Even Worse Than It Looks.

Congress neglected or failed to reach agreement on hundreds of significant issues that need to be addressed immediately, including important healthcare issues such as the Medicare SGR, the Medicaid primary care rate increase, and graduate medical education.

While this was not the first time Congress failed to repeal the SGR, it was particularly frustrating because they were so close to enacting a comprehensive Medicare payment reform bill (HR 4015 / S 2000) that had bipartisan, bicameral (House and Senate) support as well as the support of nearly every physician group within organized medicine. It was the most progress Congress had made in a decade. However, that progress came to a halt when they failed to reach agreement on the funding sources, known as “offsets.” Instead, they passed another temporary patch (the 17th patch in a decade) to prevent the larger SGR payment cuts. What’s even more frustrating is that the 17 patches now cost more than the total cost of the permanent SGR repeal legislation. Continuing to patch the SGR is not fiscally responsible!

CMA president, Dr. Luther Cobb, was in Washington, DC, during the Lame Duck session urging congressional leaders to get the SGR bill passed once and for all, but Congress fell short once again, diverting all of their limited time and attention to the bitter debate over the president’s immigration order.

Where Do We Stand in 2015?

The good news is that both the Republican and Democratic congressional leadership tell AMA and CMA that they continue to support the comprehensive Medicare SGR bill from last session: HR 4015 / S 2000. This bill will be the starting point for negotiations in 2015, and everyone is agreeing to stick with the original bill. The only remaining work is to identify funding sources that both sides can agree upon.

There is also growing support for the notion that the SGR repeal portion of the bill does not need to be fully offset with other funding sources. Many conservative organizations, such as The Wall Street Journal, the Galen Institute, and Americans for Tax Reform, have recently opined that because Congress consistently stops the SGR cuts, the SGR will never go into effect, and, therefore, the cost of getting rid of it should be $0. The SGR “savings” to the federal government are phony.

A Wall Street Journal editorial said, “Here’s a suggestion: Simply pass the bill as is and forego the pretense of fake-paying for it ….”

This would reduce the cost of the bill by ~$120 billion and only require Congress to find another ~$80 billion to fund the new physician payment systems and a package of Medicare “extenders.” Click here to read CMA's letter to the Lame Duck Congress.


The next 24% SGR payment cut occurs on April 1, 2015 — no joke, April Fool’s Day. AMA, CMA, and all of organized medicine (the national specialties and state medical associations) will join forces to urge Congress to adopt the permanent repeal legislation before March 31. We plan to put a lot of pressure on the leadership.

However, given their track record, the new Congress may not be able to get reorganized in time to adopt the long-term repeal by March 31. Moreover, it may be better for organized medicine to wait until September when Congress can include the SGR repeal in a larger financial legislative package, such as the budget bill or the Continuing Resolution (to keep the government running) or even the much-touted tax reform legislation. Including the SGR in a larger package increases our chances of finding the necessary funding. Organized medicine will be pushing hard for a March 31 date, but if that timeline is not achievable, we will work to get a very short, six-month patch to give Congress time to enact SGR legislation in September within a larger funding package.

HR 4015 / S 2000 Summary

The legislation includes two payment tracks from which physicians can choose to participate.

  1. Fee-for-service track with 0.5% annual updates; a consolidation of the quality reporting programs, a reduction in penalties, and a reinstatement of large bonuses for participating in quality programs.
  2. Alternative payment model track that provides incentive payments and includes medical homes. These models are to be developed and implemented by physicians.

The bill also includes millions in funding assistance to help small practices transition.

Grassroots Advocacy

While we are profoundly disappointed in Congress, we are closer than ever, and, therefore, we must redouble our efforts and determination to get an SGR bill in 2015. Otherwise, national politics will force us to wait until after the presidential election in 2017.

This 2015 effort will require all physicians, who are understandably fatigued by the SGR, to engage in the advocacy.

CMA will be asking all county medical societies and physician leaders to meet with their congressional representatives during the month of February, particularly over the President’s Day recess period when they will be home in their districts. CMA will provide background and talking points.

CMA physician leaders and physician leaders from all across the state will descend on Capitol Hill in Washington, DC, for the AMA Legislative Day in late February to push Congress to act.

CMA has strong relationships and direct access to the House Republican Majority Leader, Californian Kevin McCarthy (R-Bakersfield) and the House Democratic Minority Leader, Californian Nancy Pelosi (D-San Francisco), as well as all of the House and Senate committee leaders. This gives us a strong voice in Washington, DC, to positively impact legislation. We are also working with a coalition of state medical associations, as well as a coalition of specialty organizations under AMA.

CMA will also be working to build a bigger coalition of organizations to support our efforts, such as the hospitals, AARP, patient disease organizations, and the military family groups who are served by TriCare (which is governed by the Medicare fee schedule).

Finally, as we get closer to the deadline, we will be asking all physicians to call and email their representatives. We will need a loud, large volume of calls to Congress in March.


The SGR has starved physician practices in Medicare and the private sector. It has not provided the resources to help physicians meet the tsunami of Medicare regulations and avoid penalties related to quality, the value modifier, and EHR meaningful use. Moreover, seniors and military families are experiencing serious problems finding a doctor in many areas of California. HR 4015 / S 2000 will reduce the regulatory burden, reinstate incentive / bonus payments, and provide stable reimbursement to protect access to care in California.

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