The clock is ticking for passing SGR reform


For the first time since the Medicare fee schedule crisis began after the sustainable growth rate formula was included in the Balanced Budget Act of 1997, there is realistic hope that Congress will reform the way Medicare physicians are paid for their services.

Washington-For the first time since the Medicare fee schedule crisis began after the sustainable growth rate (SGR) formula was included in the Balanced Budget Act of 1997, there is realistic hope that Congress will reform the way Medicare physicians are paid for their services.

On July 31, the House Energy & Commerce Committee voted 51-0 in favor of H.R. 2810, the Medicare Patient Access and Quality Improvement Act of 2013, which replaces the SGR formula with a 0.5% payment increase for physicians from 2014 through 2018. The bill, one of several bipartisan SGR reform proposals under congressional consideration, also calls for the formation of new payment models and includes possibly troublesome quality reporting requirements.

While the measure is generally supported by the AUA, the Alliance of Specialty Medicine, and the American Medical Association, among others, there are concerns about some specific provisions and lobbyists are working to persuade lawmakers to consider modifications.

Specifically, the bill contains a penalty for those who either do not meet certain quality measures within Fee-for-Service (FFS) Medicare or choose not to participate in the FFS quality-reporting program. The AUA says it is continuing to work with lawmakers as the bill moves ahead.

Bill may be too late to avert pay cut

But that legislation is not being considered in a vacuum, and other external issues could sidetrack it and cause another end-of-the-year scramble to avoid the 24.4% Medicare pay cut currently scheduled under the SGR.

On Aug. 26, Treasury Secretary Jack Lew told Congress it would need to increase the U.S. debt ceiling by mid-October or risk possible default. Many conservative Republicans in Congress have vowed not to support a debt limit increase without further budget cuts, and some are demanding defunding of the Patient Protection & Affordable Care Act-much of which took effect Oct. 1.

While many observers do not expect a repeat of the 2011 debt ceiling crisis that was harmful to the economy, the most likely scenario is for Congress to approve a short-term continuing resolution and create another deadline again next year.

At press time, there was widespread concern that many agencies would run out of money at the end of September (when the current fiscal year comes to a close) unless a federal 2014 budget was passed. Once again, while many Republicans were demanding defunding of Obamacare, Congress will most likely continue spending at current levels.

House Speaker John Boehner (R-OH) is reportedly considering short-term legislation that would fund agencies into the beginning of the next fiscal year so lawmakers can focus on the debt limit and another looming round of automatic spending cuts, known as sequestration.

So all of that will take the time and attention of lawmakers and raises significant questions as to whether the SGR reform legislation can move through both houses of Congress before year’s end-in time to avert the scheduled Medicare payment cuts.

The bill, approved by the Energy & Commerce Committee, is designed to give physicians and other stakeholders time to help develop and test quality measures and implement quality incentive program practices at the end of the transition period in 2019.

An enhanced version of the Medicare physician quality reporting system (PQRS) would be used for this and to assess physician PQRS performance in deciding how their payments would be updated, depending on whether they achieved, exceeded, or fell short of benchmarks for their specialties.

The bill also would allow physicians to opt out of FFS and participate in an alternative payment model, such as a patient-centered medical home, bundled payment, or episode-of-care payment.

A provision targeting services deemed to be overvalued and correcting those payment rates, recouping the savings from Medicare, is included. It directs the Centers for Medicare & Medicaid Services to make net reductions of up to 1% in 2016, 2017, and 2018. Currently, if CMS reduces the value of specific codes, the money savings is reallocated to other services.

Before passing the bill introduced July 24 by Rep. Michael Burgess, MD (R-TX), the Energy & Commerce committee held several hearings and solicited input from the medical community.

Alliance writes of ‘problematic’ provisions

The Alliance of Specialty Medicine, in a letter to the bill’s sponsor and committee members, said it was generally pleased with the measure but said it includes two “problematic” provisions.

The first provides the Department of Health and Human Services (HHS) with the authority to collect data on volume and time for services, establish a reporting group of physicians (including specialists), and then provide payments for reporting.

Using that information, HHS is to more closely examine misvalued services to make payment adjustments. The Alliance said this provision should be deleted.

The second provision of concern to the Alliance is related to medical homes and coordination of care. The group also urged that this provision be deleted.

“We appreciate that many of the concerns the Alliance expressed have been addressed… and we look forward to working with you to find a permanent and meaningful solution to the flawed physician payment system,” the Alliance said in a letter signed by its members, including the AUA.UT

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