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House approves SGR bill with individual mandate penalty offset

March 14, 2014

The U.S. House of Representatives voted 238-181 today to approve legislation (H.R. 4015) that would repeal and replace the Sustainable Growth Rate formula for Medicare physician payment updates, and offset the cost of the policy changes by suspending for five years the Affordable Care Act’s tax penalty on individuals who go without health insurance. With the exception of the payment offset, the bill is similar to the SGR replacement bill unveiled by congressional leaders last month, which would provide a 0.5% payment update for five years under the fee-for-service model as a transition and allow further updates if needed. The Congressional Budget Office projects the House bill would increase by 2018 the number of uninsured Americans by about 13 million and premiums by 10%-20%. The president this week said he would veto the legislation if it reaches his desk. The Senate could vote on a different version of the bill later this month. Without congressional action, Medicare payments to physicians and other health care professionals will decline by a mandated 24.4% on April 1. The AHA has urged Congress to fix the physician payment formula, but to do so in a manner that does not result in reduced payments to hospitals.