GOP Proposes Draft Legislation To Repeal, Replace SGR Formula
On Tuesday, Â Republicans on the House Energy and Commerce Committee proposedÂ draft legislationÂ that would permanently repeal and replace the sustainable growth rate formula, which determines Medicare physician reimbursement rates,Â Modern HealthcareÂ reports (Zigmond,Â Modern Healthcare, 5/28).
Congress routinely has passed "doc fix" legislation to delay cuts called for by the SGR, though physicians face substantial reductions in their Medicare reimbursements each time such legislation expires. The most recent doc fix delayed the cuts until Jan. 1, 2014, at which time physicians face about a 25% reduction to Medicare reimbursement rates.
Hopes for a permanent repeal increased in February, after the Congressional Budget Office's budgetÂ projectionsÂ dramatically reduced the cost of eliminating the SGR from about $300 billion over 10 years to $138 billion over 10 years. Although lawmakers have attempted to repeal the SGR for years, efforts have failed because of the high cost (California Healthline, 2/6).
In April, Republicans from the House Energy and Commerce Committee and the Ways and Means Committee circulated aÂ draft plan that would replace the SGR in three phases, gradually shifting to a reimbursement system that rewards physicians for quality care (California Healthline, 4/4). The plan released Tuesday is a more-detailed version of the draft released in April.
Draft Legislation Focuses on Quality, Efficiency
The proposed legislation would first give physicians a set of predictable rates for Medicare, defined by law for an unspecified period of time (Howell,Â Washington Times, 5/28).Â
Meanwhile, providers and HHS would work together to create an "improved" fee-for-service model based on mutually determined quality measures that gradually would replace the SGR. Physicians' performance, incentives and future payment updates would be determined and measured by those metrics. HHS would review the metrics annually and could update them as needed, based on stakeholder input.Â
In addition, the legislation would allow providers to choose to participate in an approved alternative payment model, such as accountable care organizations, medical homes or bundled payments. HHS would select which models were available in a given year, and payment rates and updates would be arranged under each model.Â
Under the legislation, HHS would be required to submit to Congress a report analyzing and comparing the various alternative payment models. In addition, HHS would have to submit to Congress and to the public a biannual progress report on the implementation of the incentive payment program. Meanwhile, the Government Accountability Office would have to report on whether the program is meeting its initial and subsequent objectives and the adequacy of the quality metrics (Ethridge,Â CQ Roll Call, 5/28).
Proposal Does Not Include Funding Source
The draft legislation did not specify how the changes would be funded,Â The Hill's "Healthwatch" reports. Although replacing the SGR has bipartisan support, previous attempts to do so have not resulted in consensus over a funding source.Â
According to "Healthwatch," Republicans' goal with the draft legislation is to develop a replacement plan that can win bipartisan approval, before determining the more "partisan issue" of how to fund the measure (Baker, "Healthwatch,"Â The Hill, 5/28).
In a statement, committee Chair Fred Upton (R-Mich.) said the committee will develop a method to "responsibly pay" for the proposal (CQ Roll Call, 5/28).
The Energy and Commerce Committee has asked for feedback on the bill before a hearing scheduled for June 5 (Washington Times, 5/28).ÂThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.