H.R. 2 Medicare Access and Chip Reauthorization Act (MACRA)

TITLE I—SGR REPEAL AND MEDICARE PROVIDER PAYMENT MODERNIZATION

The legislation repeals the flawed Sustainable Growth Rate (SGR) formula and replaces it with the bicameral, bipartisan agreement to return stability to Medicare physician payments. The SGR formula is a cap on aggregate spending on physicians’ services where exceeding the cap resulted in punitive recoupments in subsequent years. The formula was passed into law in the Balanced Budget Act of 1997 to control physician spending, but it has failed to work. Since 2003, Congress has spent nearly $170 billion in short-term patches to avoid unsustainable cuts imposed by the flawed SGR. The most recent patch will expire on March 31st.

Based on H.R. 1470, the bicameral, bipartisan unified Committee bill to replace the SGR, this policy removes the imminent threat of draconian cuts to Medicare providers and ensures a 5-year period of stable annual updates of 0.5 percent to transition to a new system. The new system moves Medicare away from a volume-based system towards one that rewards value, improving the quality of care for seniors. 

TITLE II—MEDICARE AND OTHER HEALTH EXTENDERS

Subtitle A—Medicare Extenders

Sec. 201. Extension of work Geographic Practice Cost Index (GPCI) floor. Boosts payments for the work component of physician fees in areas where labor cost is lower than the national average. The provision extends the existing 1.0 floor on the “physician work” cost index until January 1, 2018.

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