Lawmakers Announce Bipartisan Deal To Repeal, Replace SGR

On Thursday, a bipartisan group of House and Senate lawmakers revealed a proposal to repeal and replace Medicare's sustainable growth rate formula and gradually implement a value-based payment system, Modern Healthcare reports.

Background

Since 2003, Congress has spent nearly $150 billion on short-term patches to stave off Medicare payment cuts scheduled under the SGR formula.

The most recent short-term "doc fix" is set to expire March 31, after which physicians would face significant cuts to their Medicare reimbursement rates unless Congress acts to forestall the cuts or repeal the formula outright.

Details of the Plan

The SGR Repeal and Medicare Provider Payment Modernization Act -- which was crafted by the Senate Finance Committee and the House Ways and Means and Energy and Commerce committees -- would repeal the SGR formula and institute a 0.5% annual payment increase for physicians between 2014 and 2018. This increase would be maintained until 2018 in an effort to offer payment stability and help doctors transition to new care models.

Physicians beginning in 2018 would participate in a new merit-based incentive payment system -- called MIPS -- that would consolidate three existing incentive programs:

• The Physician Quality Reporting System;
• The Value-Based Payment Modifier; and
• Meaningful use of electronic health records.

According to Modern Healthcare, MIPS would apply to:

• Chiropractors;
• Certified registered nurse anesthetists;
• Clinical nurse specialists;
• Dental surgery or dental medicine;
• Nurse practitioners;
• Physician assistants;
• Physicians of medicine or osteopathy; and
• Podiatric medicine.

Other health care professionals could be added to MIPS starting in 2020 (Zigmond, Modern Healthcare, 2/6).

According to a one-page summary of the legislation, the new payment system would:

• Encourage care coordination initiatives for patients with chronic illnesses;
• Increase public access to provider payment data;
• Replace disvalued codes to improve payment accuracy; and
• Require development of quality measures in collaboration with physicians.

In addition, the bill would award a 5% bonus to physicians who collect at least 25% of their Medicare revenue from an alternative payment model in 2018. Such models include accountable care organizations, patient-centered medical homes and other public or private payer initiatives. The 25% threshold would increase with time (Pittman, MedPage Today, 2/6).

The proposal also would create a "technical advisory committee" that would review and recommend physician-developed alternative payment models based on "criteria through an open comment process" (Carey, Kaiser Health News, 2/7).

Implications for Health IT

In addition to combing CMS' incentive program for EHRs with two other programs, the proposed legislation would require HHS to make public a list of clinical-decision support tools by April 1, 2016, Modern Healthcare reports.

The list would be used in a program that, beginning Jan. 1, 2017, would require clinicians ordering scans for their patients to consult with one of the listed qualified systems and ensure that the scans follow "Appropriate Use Criteria" before Medicare would cover them.

HHS would be required to monitor clinicians' use of AUCs, and those who are found to be non-compliant will be "subject to prior authorization for applicable imaging services."

The proposal also would require EHRs to be "interoperable by 2017" and it would "prohibit providers from deliberately blocking information sharing with other EHR vendors" (Conn, Modern Healthcare, 2/6).

Funding Unclear

Although lawmakers touted the agreement, they have yet to determine a way to cover the cost of repealing and replacing the SGR, National Journal reports (Ritger, National Journal, 2/6). According to a GOP aide, the bipartisan proposal would cost about $126 billion over a decade (Modern Healthcare, 2/6).

Reaction

Senate Finance Committee Chair Max Baucus (D-Mont.) praised lawmakers for agreeing on policies that modernize physician payments. "Congress has spent a decade lurching from one 'doc fix' to the next, creating a new, unnecessary threat to seniors' care each time. Enough is enough," he said, adding, "This bill is the product of years of hard work, and I hope Congress comes together to pass it" (Zigmond, Modern Healthcare, 2/6).

American Medical Association President Ardis Dee Hoven welcomed the deal and urged lawmakers to act quickly. In a statement she said, "Congress has been debating the shortcoming of the SGR policy for more than decade. Continuing the cycle of short-term patches by merely addressing the 2014 cut that is imminent on April 1 without solving the underlying problem would be fiscally irresponsible and further undermine the Medicare program" (Kaiser Health News, 2/7).