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March 20, 2015 The Honorable John Boehner The Honorable Mitch McConnell Speaker of the House Senate Majority Leader 1101 Longworth House Office Building 317 Russell Senate Office Building Washington, DC 20515 Washington, DC 20510 The Honorable Nancy Pelosi The Honorable Harry Reid House Minority Leader Senate Minority Leader 235 Cannon House Office Building 522 Hart Senate Office Building Washington, DC 20515 Washington, DC 20510 Dear Speaker Boehner, Leader Pelosi, Leader McConnell, and Leader Reid: We are writing to encourage Congress to enact a permanent and fully paid-‐‑for replacement to the Sustainable Growth Rate (SGR) that reforms and improves the health care system without adding to the national debt. As you know, physicians face an across-‐‑the-‐‑board cut in their Medicare payments at the end of the month as a result of the flawed SGR formula. Legislation developed by the Finance, Energy & Commerce, and Ways & Means committees (the Tricommittee bill) would not only avoid this abrupt cut, but put in place a new payment formula that would begin to reward value and quality as opposed to quantity of care. New incentives in the bill would continue to transition Medicare away from fee-‐‑for-‐‑service payment. We strongly support the ideas behind the Tricommittee bill; however, we are concerned that without offsets, it will add significantly to the debt and represent a wasted opportunity to enact further health reforms. Even with the offsets apparently under consideration, SGR reform would cost about $140 billion over the next decade, before interest. Contrary to charges that the SGR represents little more than a budget gimmick, “doc fixes” to avoid SGR cuts have been paid for 98 percent of the time since 2004, resulting in $165 billion worth of savings, almost entirely from health care programs. Luckily, there is no shortage of available health reform options, and many have bipartisan support. A number of us have put forward our own ideas or plans to reduce Medicare costs, as has President Obama and Chairman Ryan. All of these options are available to provide sufficient offsets. Importantly, many available Medicare savings options would also represent fundamental improvements to the program that can reduce costs and improve outcomes for many seniors. Coupling these reforms with the Tricommittee bill will strengthen the health reforms in the legislation, and help to improve the effectiveness and sustainability of the Medicare program for this and future generations. We look forward to working with you to develop a fiscally responsible solution to replace the Medicare Sustainable Growth Rate. Sincerely, Joseph R. Antos Wilson H. Taylor Scholar Health Care and Retirement Policy American Enterprise Institute Robert Bixby Executive Director The Concord Coalition Maya MacGuineas Alice Rivlin President Leonard D. Schaeffer Chair, Health Policy Studies Committee for a Responsible Federal Budget Director, Engelberg Center for Health Care Reform The Brookings Institution