Congress has adopted legislation that will eliminate the Centers for Medicare & Medicaid Services’ (CMS) use of the physician payment formula known as the sustainable growth rate (SGR) formula.

The Medicare Access and CHIP Reauthorization Act of 2015 received 392 votes in the House and 92 votes in the Senate. According to a White House blog post, this law strengthens Medicare, extends the Children’s Health Insurance Program (CHIP), and makes numerous other improvements to the healthcare system.

Doctors who care for Medicare patients will no longer have to worry about the possibility of an arbitrary cut in their pay. Medicare beneficiaries won’t have to worry that the SGR formula will jeopardize their ability to see a provider.

The new law helps orient Medicare’s physician payment system toward rewarding the quality of the care physicians provide a patient rather than just the number of tests and procedures they do for a patient. The Actuaries at CMS estimate that the percent of Medicare physician payments in payment models that encourage higher quality care would more than double in four years, from 25% this year to 60% in 2019 as a result of this law. In addition, the law increases Medicare’s ability to share privacy-protected data with clinicians.

The law also extends CHIP, which has provided health coverage to over eight million children. The law also continues the Maternal, Infant, and Early Childhood Home Visiting Programs, protects access to care through Community Health Centers, extends the National Health Service Corps and Teaching Health Center funding and makes permanent a program to assist low-income individuals with their Medicare premiums.

According to an AMA Viewpoints post by American Medical Association President Robert M. Wah, MD, here are five benefits of the passing of the bipartisan legislation:

  • Medicare and TRICARE patients will no longer face constant uncertainty over whether they might lose their access to care.
  • Physicians’ practices will be more sustainable.
  • The path will be cleared for new models of care.
  • Health outcomes will be improved in the clinic setting and the community.
  • Physicians in training will be taught how to practice in the new health care environment.

President Barack Obama signed the Medicare Access and CHIP Reauthorization Act on April 16.