Medicare Payment Discussions Begin on Capitol Hill

(February 22, 2013)

Discussions related to the repeal of the sustainable growth rate (SGR) formula, which is used to calculate Medicare payments, were revitalized last week on Capitol Hill. The Medicare Physician Payment Innovation Act of 2013 (H.R. 574) was introduced by Congresswoman Alyson Schwartz (D-PA), and the chairmen of the Energy and Commerce Committee and the Ways and Means Committee released a joint proposal for reform.

Medicare Physician Payment Innovation Act of 2013

H.R. 574 focuses on primary, preventative, and coordinated care services, and includes references to speech-language pathology and audiology. The legislation would require the Secretary of Health and Human Services to work with stakeholders in the development of payment models for outpatient therapy and speech-language pathology services based on (a) treatment session and episode of care or (b) other bundled payment methodology. Both models take into account the severity and complexity of a patient's diagnosis as well as the intensity of the services provided.

The legislation recognizes ASHA's Certificate of Clinical Competence for both audiology and speech-language pathology in a provision related to providing a 1-year exemption for providers who would otherwise be penalized or receive negative updates as a penalty for not moving to a new payment model.

Joint Proposal

Additionally, the Energy and Commerce Committee and the Ways and Means Committee put forth a joint proposal for payment reform including a three-phase framework that would

  1. repeal the SGR and provide a period of predictable updates,
  2. reform the Medicare fee schedule system to reward providers- including speech-language pathologists and audiologists-who provide high quality care, and
  3. build upon the improvements made in Phase 2 by rewarding providers who deliver efficient care.

The committees are seeking comments on this framework, and ASHA will provide feedback.


The SGR is a formula that came out of the Balanced Budget Act of 1997 as a means to control Medicare outpatient payments to providers. It is a method to ensure that the yearly increases in Medicare expenditures do not exceed the growth in GDP. Over the years, the payment formula has produced unrealistic expenditure targets, which triggered significant reductions in Medicare payments. These proposals are a starting point for discussion as Congress strives to move Medicare payments to reward the inclusion of quality and efficiencies in provider practices.

Additional Resources

More detailed information is posted on the Energy & Commerce Committee website. For more information on H.R. 574 in relation to speech-language pathology and audiology, please contact Ingrida Lusis, ASHA's director of federal and political advocacy, at [email protected].

ASHA Corporate Partners