Press Releases

Roe Supports Legislation to Repeal and Replace Medicare’s Sustainable Growth Rate

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Washington, March 26, 2015 | Tiffany Haverly (202-226-8072) | comments

WASHINGTON, D.C. – Today, Rep. Phil Roe, M.D. (R-TN) voted in support of H.R. 2, bipartisan legislation to repeal and replace Medicare’s flawed Sustainable Growth Rate (SGR) formula, also known as the ‘doc fix’. The bill also includes an important provision to help hospitals in Tennessee.

Roe released the following statement:

“This agreement is one of the most important things we’ve accomplished since I’ve been in Congress, and I couldn’t be prouder of the work done by the House Energy and Commerce and Ways and Means Committees, along with the GOP Doctors Caucus. This bill will ensure Medicare recipients have access to quality care and help pave the way for entitlement reform by extending the sustainability of the program. I am thrilled that, after years of temporary, expensive fixes, Congress has united to get this done for seniors and doctors. I am also pleased to see Tennessee will receive important disproportionate share hospital funds and will no longer be at a disadvantage to other states.”

Roe also spoke on the House floor in support of H.R. 2. You can watch his remarks here.


SGR was established as part of the Balanced Budget Act of 1997 and is a formula that determines the annual updates for Medicare physician reimbursements. Since 2002, the SGR formula has required annual cuts to reimbursements because actual spending exceeded budgeted amounts. After allowing a cut to go into effect in 2002, Congress has enacted more than 17 temporary fixes since 2003 to prevent further cuts to physicians. These temporary patches threatened seniors’ access to care and caused tremendous uncertainty for physicians. Because the cuts were unsustainable, Congress has had to spend $170 billion to make these 17 fixes.

H.R. 2 would permanently repeal the SGR and replace it with a value-based model that provides greater stability for physicians. The House GOP Doctors Caucus advocated for several key reforms to the SGR replacement. The bill guarantees a transition period, so the new formula does not phase in for five years, and physicians are provided a positive update in the meantime. Additionally, the legislation preserves the fee-for-service model under Medicare, which is important for small group practices and rural physicians. The legislation also guarantees all physicians who meet quality benchmarks are rewarded, rather than competing for a fixed sum of dollars. The House GOP Doctors Caucus laid its principles out in a letter to committee leadership on December 13, 2013.

The agreement also addresses Tennessee’s disproportionate share hospital (DSH) allotment until 2025. In order to obtain its waiver for TennCare in 1994, Tennessee agreed to forgo Medicaid DSH payments – which are intended to reimburse hospitals that serve a large number of Medicaid and uninsured populations – because of an expected drop in the uninsured rate. Since reversing course on TennCare, Tennessee has had to receive a special waiver to receive a partial DSH payment. This legislation extends the partial DSH payment for 10 years so that Tennessee’s hospitals are put on a more even playing field, which is important particularly because of how many patients cross state lines to receive care. Most recently, all nine members of the delegation sent a letter to Centers for Medicare & Medicaid Services’ then-Administrator Marilyn Tavenner last December supporting TennCare’s waiver extension request. A copy of that letter can be found here. The delegation followed up with a March 4 letter to House leadership requesting the provision’s inclusion in this legislation, which can be found here.
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