Senate Joins House to Repeal Sustainable Growth Rate (SGR) Averting Future Deep Cuts or Additional Reimbursement Patches

April 14, 2015

President expected to sign legislation immediately

Attributable to:
David A. Fleming, MD, MA, MACP
President, American College of Physicians

We all witnessed something quite extraordinary and historic today when the Senate followed the House in passing comprehensive legislation to repeal Medicare's Sustainable Growth Rate (SGR) formula (H.R. 2) and transition us to a new value-based system. After consideration of a series of amendments, the Senate passed the measure. This comes on the heels of an overwhelming show of support in the House, where both Republicans and Democrats voted in favor of H.R. 2 on March 26.

President Obama is expected to sign the bill immediately, which will avert a 21 percent physician payment cut from taking effect.

ACP applauds the efforts of so many in Congress who worked in a bipartisan fashion, over many years, to develop this legislation. Repeal of the SGR has been a priority of ACP's, and nearly all of medicine, for more than a decade. Physicians and their patients no longer will have to be concerned with impending yearly payment cuts as a result of the flawed SGR formula and no longer will this burden of uncertainty be hanging over physician practices. Equally important, the legislation provides strong incentives for physicians to engage in activities to improve quality; streamlines existing quality reporting programs; and provides additional support to physicians who participate in Patient-Centered Medical Homes, and other alternative payment models, shown to improve outcomes and the effectiveness of care provided.

The SGR repeal is finally finished but it did not come about easily. On behalf of all of us at ACP, we say thank you to Congress for seeing the wisdom of repealing this flawed formula and to our 141,000 members for their tenacious advocacy over this long journey to SGR-repeal. ACP's advocacy efforts will continue, but now with a renewed focus on other key priorities that include: extension of Medicare's Primary Care Incentive Program beyond 2015, reinstatement of the Medicaid Primary Care Pay Parity program, and support of important physician workforce issues like Graduate Medical Education (GME) financing reform.

On this day, we can and should pause for a long-awaited celebration. The exhausting effort to repeal the SGR has finally crossed the finish line.

Highlights of the H.R. 2 legislation include:

  • The SGR is permanently repealed, effective immediately; reversing the 21 percent SGR cut that went into effect on April 1.
  • Positive payment updates of 0.5 percent are provided for four-and-a-half years, through 2019.
  • Current quality incentive and payment programs are consolidated and streamlined into a new Merit-based Incentive Payment Program (MIPS), and the aggregate level of financial risk to practices from penalties has been mitigated in comparison to current law.
  • Physicians in alternative payment models (APMs) receive a 5 percent bonus from 2019-2024.
  • Strong incentives are created for physicians to participate in a qualified Patient Centered Medical Homes (PCMHs), an innovative model of care that has been shown to improve outcomes, patient experience, and reduced costs. Physicians in qualified PCMHs will get the highest possible score for the practice improvement category in the new MIPS program. PCMHs that have demonstrated to HHS the capability to improve quality without increasing costs, or lower costs without harming quality, can also qualify as an APM without having to accept direct financial risk.
  • Technical support is provided for smaller practices, funded at $20 million per year from 2016 to 2020, to help them participate in APMs or the new MIPS program.
  • Funding is provided for quality measure development, at $15 million per year from 2015 to 2019. Physicians retain their preeminent role in developing quality standards.

In addition, H.R. 2 provides continued funding of the National Health Services Corps, Community Health Centers, Teaching Health Centers, and the Children's Health Insurance Program, programs that are especially important to ensuring patient access to primary care.


The American College of Physicians is the largest medical specialty organization and the second-largest physician group in the United States. ACP members include 141,000 internal medicine physicians (internists), related subspecialists, and medical students. Internal medicine physicians are specialists who apply scientific knowledge and clinical expertise to the diagnosis, treatment, and compassionate care of adults across the spectrum from health to complex illness. Follow ACP on Twitter and Facebook.

Contact: David Kinsman, (202) 261-4554