CBO: 10-year repeal of sustainable growth rate would cost $316 billion

Permanent repeal of the sustainable growth rate, which controls the Medicare fees physicians receive for their services, would cost $316 billion by 2022, according to a new Congressional Budget Office report.

The CBO, which released its Budget and Economic Outlook report Tuesday, said outlays for Medicare would be $9 billion higher in 2012 alone if Congress overrides a scheduled 27 percent reduction under the SGR, which would take effect March 1.

“If, instead, lawmakers override those scheduled reductions—as they have every year since 2003—spending on Medicare might be significantly greater than the amount projected in CBO’s baseline” to the tune of $316 billion by 2022, the report read.

The cost of a permanent repeal to the SGR has swelled considerably since 2003. As recently as 2005, the cost of repeal would have been $48 billion; in November 2011, the last time CBO calculated the cost, it was $290 billion.

In a recent statement, the American Medical Association asked Congress to use projected spending for the wars in Iraq and Afghanistan to stabilize Medicare as those efforts wind down.

“There is bipartisan agreement that this issue has plagued Medicare and TRICARE for too long, and the cost for a permanent cure will never be less than it is right now,” AMA President Peter W. Carmel, MD, said last week. “By eliminating this failed formula once and for all, Congress can stop growing the size of the problem for patients, physicians and taxpayers.”

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