Last Thursday, the Senate passed H.J. Res. 45, a resolution to raise the federal debt limit. Included in the Resolution was a provision that reinstitutes PAYGO rules for new spending. Any new spending or tax cuts would have to be offset by corresponding spending cuts or tax increases. Several limited exemptions were made to the PAYGO rule, including one for the SGR. Some have characterized the SGR exemption as a five year freeze. While the exemption is in the amount that could fund a five year freeze with larger cuts and a higher cost in the out years, the actual exemption does not implement new Medicare physician payment policy. Instead, this action means that up to $82 billion in spending for an SGR fix would not be required to be offset by other revenue or cuts. The House is expected to take up H.J. Res 45 this week.

It will still be up to Congress to enact separate legislation to stop the SGR cuts prior to March 1, 2010. The AMA will continue to insist that Congress pass legislation that will permanently repeal the SGR. In conjunction with the PAYGO exception, an additional $130 billion in offsets will still be required. The AMA will continue to keep you updated as we work with Congress, the Administration, and other physician groups to achieve our common goal of repeal of the SGR.