Latest SGR fix proposal draws AUA criticism

Washington-Congress appears ready to finally kill off the sustainable growth rate formula (SGR) and fix the difficult physician fee schedule situation that has plagued urologists and other Medicare physicians for a decade, with a 3-month extension of current rates approved by Congress in December and bills permanently repealing the SGR ready for final action early next year.

The House of Representatives approved the 3-month extension Dec. 12 and the Senate followed on Dec. 18. Meanwhile, key House and Senate committees approved repeal legislation, also in December, replacing the SGR with alternative payment models and quality incentive programs to determine payment rates for Medicare services. That legislation is expected to be considered by the full Congress before the 3-month SGR extension expires.

While the complex bipartisan proposal originally would have frozen fee schedule rates for the next 10 years, lawmakers in both chambers provided a 4-year period of 0.5% payment increases. At the end of the 4-year period, the rates would remain unchanged through 2023. The legislation creates two payment components-a value-based performance (VBP) program and an alternative payment model (APM).

The action will avert the 24.4% overall Medicare physician fee cut that had been scheduled for 2014 under the SGR. On Nov. 27, the Centers for Medicare & Medicaid Services (CMS) released its final rule updating policies and payment rates for Medicare physician services for 2014, and included the 20.1% conversion factor reduction that results in the fee cut. (Also see, “More PQRS requirements in Medicare final rule") With Congress’ action, that will be changed.

Meanwhile, as Congress was considering the bipartisan bicameral proposal to fix the Medicare fee schedule for good, the AUA fired off a detailed letter Nov. 12 to the Senate Finance and House Ways & Means Committees expressing serious reservations about key details, including the 10-year payment freeze.

“The AUA is very concerned about the proposal to freeze current payment levels for another 10 years, given that Medicare physician payments have already trailed inflation for nearly 10 years,” wrote AUA Health Policy Chair David F. Penson, MD, MPH, in the AUA’s letter.

“Extending current payment levels for another decade will result in a nearly 45% cumulative gap between the actual cost to treat Medicare patients, rising practice expense, and the cost of inflation.”

After 2023, professionals participating in APMs would receive annual updates of 2%, while those who do not would only receive 1%. Also for APM participants, there would be an opportunity for a 5% annual bonus from 2016 to 2021, if they meet certain criteria.

Those providers also would be exempt from the VBP program, under which Medicare payments would be in a budget-neutral manner based on performance starting in 2017. Physicians under the VBP would continue to be paid under the physician fee schedule, but penalties and payment incentives under existing quality, resource use, and EHR programs would be combined and streamlined.

In its comments to the lawmakers, the AUA pointed out that the “APMs involve two-sided financial risk with various revenue percentage thresholds that providers must earn to qualify for the bonus. The proposal also encourages testing of APMs for specialty providers and those that align with private and state-based payer initiatives.”

Dr. Penson said the AUA supports the streamlining of current quality reporting mechanisms rather than maintaining three distinct programs, which create “extraordinary financial and especially administrative burdens” for physicians and staff. Moreover, he said, the AUA is “deeply concerned” that applying a payment adjustment in 2017 would only provide 1 year of stability, not the 3 years the proposal implies, and that physicians would have insufficient time to prepare.

The AUA asked the lawmakers to provide “an appropriate time frame for implementation of this program recognizing that physicians require adequate time to meet the challenge of changing office procedures, preparing documentation, etc. in order to accurately report on their performance.”

AUA: Bill should recognize specialty measures

Dr. Penson noted in the AUA letter that the draft proposes to provide funding for measure development priorities for professionals, address current gaps in quality measurement programs, and ensure meaningful measures on which to assess professionals. He said the AUA supports funding for measure development to address gaps, but emphasized that the legislation should recognize clinically meaningful and scientifically sound measures developed by medical specialty societies.

The AUA, he said, has been developing “rigorous guidelines for more than 15 years, and the next logical steps are the development of measures for inclusion in federal quality reporting programs to enable our members to satisfactorily participate in quality programs.”UT

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