Action Needed on SGR Fix

March 25, 2015

To: CEOs, WSHA Board Members, and Government Affairs Representatives (The Oregon Association of Hospitals and Health Systems sent a similar message to their members.)
From:  Cassie Sauer, Senior Vice President, WSHA; Chelene Whiteaker, Director, WSHA; John Flink, OAHHS-WSHA Federal Lobbyist; Robin Moody, Senior Director, OAHHS; Andi Easton, Associate Vice President, OAHHS
ACTION NEEDED:  Based on an impending Congressional vote to repeal and replace the flawed Medicare methodology for reimbursing physicians (SGR fix), we are writing today to request that you contact your federal Congressional delegation in support of the legislation.  The House is expected to vote tomorrow, Thursday, March 26.
The current patch to the Medicare Sustainable Growth Rate (SGR) expires on April 1, and Medicare payments to physicians will be cut by 21 percent on that date without Congressional action. 
Yesterday, Congressional leaders released details of a package that would permanently replace the SGR with a new policy that would incentivize quality of care and provide greater value for dollars spent on Medicare treatment.  It also would extend the Children’s Health Insurance Program (CHIP) for two years.
Prior to the announcement, Oregon and Washington State hospitals and the American Hospital Association have been adamant and consistent in these messages: 

  • We must avoid the 21 percent Medicare provider cut.
  • We support repealing the SGR formula for reimbursing physicians and replacing it with a formula that rewards improved quality of care and patient outcomes. 
  • This fix must not be funded on the backs of hospitals. In particular, we have opposed site-neutral payment cuts to hospital outpatient services, and cuts in Medicare payments for graduate medical education and to Medicare bad debt payments.  

A 10-year deal, known as the SGR Repeal and Medicare Provider Payment Modernization Act, has been reached. In our estimation and in the view of the American Hospital Association, the proposal is very good. The underlying policy for replacing the SGR was agreed to in 2013 in a bipartisan and bicameral Congressional manner, but has languished as further patches have been enacted. The AHA has asked its affiliated state hospital associations and hospitals to voice their support, citing the following reasons: 

  • Of the $210 billion 10-year estimated cost for the entire package, only $70 billion would be paid for, and less than $22 billion of that sum would come from cuts to hospitals. Those cuts, according to the AHA, would come primarily from modifications to the way annual updates are made beginning in 2018. 
  • We are very pleased that site-neutral payment cuts to hospital outpatient services, cuts in Medicare payments for graduate medical education, cuts to critical access hospitals, and bad debt reductions are not included in the legislation. There is also no further delay in ICD-10 implementation.
  • The legislation extends the partial enforcement delay of Medicare’s “two-midnight” policy through September 30, 2015 – an additional six months.  

This legislation is not perfect – it does not address changes to the 96-hour rule or to the Recovery Audit Program. But it minimizes harm to hospitals and provides a unique opportunity to repeal an outdated payment model and replace it with one that could benefit Oregon and Washington, where providers are already actively transitioning to new payment models. We are supporting this legislation, and asking our members to call their Congressional delegation immediately in support of this change. Both Senator Ron Wyden and Senator Patty Murray will be key votes in the Senate on this measure. They may have concerns about the length of the CHIP extension and want to see a longer extension, so voicing our support for the package is essential.

Please contact your federal Congressional delegation with the following key messages:

  • Please support the SGR Repeal and Medicare Provider Payment Modernization Act as it makes its way through Congress.
  • This measure repeals the problematic Medicare Sustainable Growth Rate policy that has caused significant problems for physicians, hospitals, patients and Congress.
  • The proposal before you minimizes cuts to hospitals that would have directly affected patient access to care. We are very supportive of the approach taken that continues access to needed outpatient care for Medicare beneficiaries.
  • We are very supportive of the extension of the Children’s Health Insurance Program.  

Contact Your Senators and Representative Today!
Senator Murray

Senator Cantwell

Representative Contact Information

  • Click here for a directory of Congressional staff. Send your messages to the Chief of Staff and the Health Legislative Aide. When you make contact, please let Chelene Whiteaker ( know and again when you hear back from them.  

For questions, please contact Chelene Whiteaker at or 206-216-2545.


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