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Medicare’s sustainable growth rate should be repealed, Iowa Rep. Latham says

WASHINGTON – Iowa Representative Tom Latham said Sunday that Medicare’s sustainable growth rate (SGR) should be repealed.

The SGR specifies the formula for establishing yearly sustainable growth rate targets for physicians’ services under Medicare. The use of SGR targets is intended to control the growth in aggregate Medicare expenditures for physicians’ services.

Rep. Tom Latham
Rep. Tom Latham

For too long, our nation’s seniors have been forced into a position where their health care provider’s uncertainty has caused them to stop seeing those who use Medicare. In rural states like Iowa, this involves a majority of patients and reduced health care options and choices is just as problematic as health care denied.

The nation’s Medicare program has been using the Sustainable Growth Rate (SGR) system that was enacted in 1997 to attempt to control health care spending. This system has failed to work as it was intended and it has caused American taxpayers to continually lose access to the Medicare healthcare program that they have been paying into their whole lives and plan to rely on for retirement security.

This is wrong and the SGR needs to be repealed.

This past Friday, the U.S. House of Representatives approved H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014. This bi-partisan solution prevents a 24% cut in Medicare payments to health care providers and rewards them for high quality service.

The legislation provides for a final SGR “fix” and replaces the Medicare health care provider reimbursement system by moving it towards a quality – not quantity – of service based system. This policy reforms the short term patches from years of pushing the problem down the road and transitions to a new common sense system based on rewarding health care provider performance, alternative payment models, and expands the use of Medicare data for transparency and quality improvement.

The House passed solution is also fiscally responsible because it is fully paid for by delaying the individual mandate tax penalty in President Obama’s new health care law for the next five years. This delay results in a nearly $21 billion net deficit reduction according to the non-partisan Congressional Budget Office (CBO).

I have always favored and worked for a permanent solution to this problem that repeals or replaces the flawed SGR formula. As a co-sponsor of this legislation, my hope is that the United States Senate will understand the importance of this legislation to America’s seniors and the stability of the Medicare health care program on which they rely.

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