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Energy and Commerce Health Subcommittee Approves SGR Repeal Legislation

July 26, 2013—The House Energy and Commerce Health Subcommittee held a July 22-23 markup of draft legislation that would reform Medicare physician payment, repeal the sustainable growth rate (SGR) formula, and establish an enhanced fee-for-service model with payments based on quality and innovation [see Washington Highlights, July 12].  Only one technical corrections amendment was offered prior to the subcommittee approving the legislation by voice vote.

While expressing his support for the SGR repeal effort, Rep. Eliot Engel (D-N.Y.) echoed AAMC’s concerns regarding the need to ensure adequate risk adjustment as part of determining physician quality saying, “I think all of my constituents deserve to have access to high quality health care. Therefore, I want to assure proper risk adjustment is done within both the quality update incentive program and alternative payment models to help account for the impact of socio-economic factors in determining physician reimbursement in these programs.”

In his opening statement, Health Subcommittee Chair Joe Pitts (R-Pa.) said, “The time of temporary fixes, and kicking the can down the road has ended. The bipartisan committee draft before us today permanently repeals the SGR and places us on a path to paying for innovation and quality, not volume of services, and puts doctors, not bureaucrats, back in charge of medicine.”

Chairman Pitts acknowledged the collective effort to repeal the SGR, stating that the “draft before us today incorporates ideas and principles from the provider and patient communities, from Republicans and Democrats on the committee, and from our physician colleagues in the Doctor Caucus.”

Energy and Commerce Committee Chair Fred Upton (R-Mich.) highlighted the necessity of SGR repeal, stating, “This legislation is over 15 years in the making as the highly flawed SGR has frustrated patients, doctors, and lawmakers alike since its first passage back in 1997. It modernizes the payment system by actually listening to the medical community’s best practices and ensuring that the care patients receive is based off those best practices.”

Ranking Member Henry Waxman (D-Calif.) reminded his colleagues that this is the beginning of the process, saying, “This is the first step, and an important one, but this is a process that has to start, we can’t accept the current system any longer. We have bipartisan agreement on that.” Continuing to highlight the bipartisan collaboration, he said, “We share the priorities of wanting to move our payment system from one that rewards volume to one that aligns incentives and rewards quality, efficiency and improved patient outcomes.”

Subcommittee Vice Chair Michael Burgess (R-Texas) and Ranking Member Frank Pallone (D-N.J.) offered one technical amendment that would clarify intent but offer “no substantive changes.” The subcommittee adopted the amendment by voice vote and the full committee is expected to consider the legislation on July 31.


Len Marquez
Director, Government Relations
Telephone: 202-862-6281

Courtney Summers
Senior Legislative Analyst
Telephone: 202-862-6042


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
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Telephone: 202-903-0806