Congress, White House pressing for SGR repeal

March 1, 2015

Have the stars finally become aligned in such a way that Congress resolves the perennial Medicare physician fee fiasco? The signs seem to point that way.

Bob GattyWashington-Have the stars finally become aligned in such a way that Congress resolves the perennial Medicare physician fee fiasco? The signs seem to point that way, and that certainly would be good news for urologists.

In fact, by the time you read this, it may already have happened. But then, haven’t we said that before?

Just in case it does, though, let’s put into perspective some of the developments that have taken place over the last few months.

Support gaining for repeal bill

First, key House and Senate committees late last year agreed on legislation to repeal the sustainable growth rate (SGR) formula, but they could not agree on a way to pay the estimated $144 billion 10-year cost. However, the bill was endorsed by much of the medical community and has since gained increased support.

Then, after the new Republican-controlled Congress was sworn in, the first hearing of the 114th Congress by the House Energy & Commerce Health Subcommittee, held Jan. 21 and 22, focused on “A Permanent Solution to the SGR: The Time is Now.”

Once again, there was universal agreement by witnesses and both Republican and Democratic lawmakers that the SGR must be repealed and that another “doc fix” patch should be avoided. That patch would be required by March 31 to avoid a 21% Medicare payment cut.

But, once again, there was less-than-universal agreement on how to pay for it, with some committee members (Democrats) even suggesting that it could be done without specifically enacting “pay-fors.”

“If members are serious about seizing this historic moment to pass SGR reform, as a purely practical matter, for the bill to pass the House of Representatives and Senate, it must include sensible offsets,” declared Subcommittee Chairman Joseph Pitts (R-PA).

Rep. Fred Upton (R-MI), chairman of the full committee, cautioned against framing discussions on “merely budgets or beneficiaries.” In fact, he said, the “out-of-control” Medicare budget is on the “fast track to insolvency.” That, he added, threatens long-term access to care for seniors who depend on the program.

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It was only a couple weeks after that hearing that President Obama submitted his fiscal year 2016 federal budget to Congress, a document that was quickly dismissed by GOP congressional leaders. However, in that budget was a call for Congress to repeal the SGR and reform Medicare physician payments “in a manner consistent with the reforms included in recent bipartisan, bicameral legislation.”

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The administration’s budget includes numerous initiatives to generate Medicare savings by more than $415 billion over the next decade. Plus, he called for the end of sequestration, cuts triggered by the Budget Control Act of 2011 that slashed Medicare rates by 2% through 2021.

To encourage health care providers who deliver better care and better outcomes for patients, the administration set a goal for 2016 of making 30% of Medicare payments through alternative payment models that link payment to delivery of efficient, high-quality, coordinated health care rather than for volume of health care services. The goal by 2018 would be 50%. Reforming the SGR would help achieve that, the president said.

Bill reflects emphasis on quality

Last year’s legislation would have provided positive payment updates of 0.5% for the first 5 years, and then would have frozen payments for an additional 5 years to allow for the development and adoption of new, innovative payment and delivery models. Then, payments would be determined by many factors, including performance in the newly created Merit-Based Incentive Payment System (MIPS) for those who remain in the fee-for-service payment system.

Physicians in qualifying alternative payment models would receive a 5% bonus for 5 years.

In addition, the MIPS program would harmonize the various Medicare quality reporting programs, noted Barbara L. McAneny, MD, chair of the American Medical Association Board of Trustees. These would include the Physician Quality Reporting System, Electronic Health Record Incentive Programs/Meaningful Use, and the Value-Based Payment Modifier.

The requirements of these individual programs, Dr. McAneny told the Health Subcommittee Jan. 22, are often contradictory and duplicative, and impose “an unreasonably high burden and unduly high penalties on physicians, without clear evidence that they actually improve the quality of care.”

“Under the current Medicare payment system, physicians lose revenue if they perform fewer procedures or lower cost procedures, even if their patients are healthier as a result. Most fundamentally, under Medicare, physicians are not paid at all when their patients stay well,” she said.

She pointed out that many high-value services are not reimbursed by Medicare.

“Medicare will not pay primary care physicians and specialists to coordinate care by telephone or email, yet it will pay for duplicate tests and the problems caused by conflicting medications,” she said.

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The bottom line, warned Dr. McAneny, is that physicians can’t continue the way things are today, pointing out that from 2001 to 2015 the cost of caring for patients, according to the government, has gone up 27%, while the average annual Medicare physician payment update has been only about 0.3% per year. Adjusted for inflation, it’s actually fallen by 18%.

So the politicians in Washington, both in Congress and at the White House, say now is the time to act.

Let’s see if they do.

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