February 6, leaders of the congressional committees with jurisdiction over
Medicare announced a deal on a sustainable growth rate (SGR) repeal and
replacement policy. Agreement was announced with 53 days remaining before the
current patch preventing drastic cuts to Medicare physician payments expires.
deal reflects a compromise among SGR bills passed last year by the Senate
Finance, and House Energy and Commerce and Ways and Means Committees. The committees have been working against the
SGR patch deadline and the exit of the Finance Committee Chairman Max Baucus
(D-MT), who was confirmed on February 6 as U.S. Ambassador to China. Sen. Ron Wyden (D-OR) is set to take over as
chairman of the committee, and it is unclear what impact that transition will
have on the pace of advancing an SGR bill.
missing from the deal is a way to pay for it. Committee staff who briefed
physician organizations on February 6, said not to read into the
lack of offsets at the moment. What is clear is that lawmakers are awaiting the
reaction of the physician community to the deal before making some potentially
unpopular decisions about offsets. The
message to physician groups was clear – there is an opportunity to put an end
to the SGR, but the unified support of the physician community is going to be
needed. Suggestions of another SGR patch
were rebuffed by committee staff. If another patch is considered it could delay
SGR repeal indefinitely, and the cost of repeal could rise in the meantime.
key components of the deal are:
SGR Repeal and Replacement
- 10 years of payment stability during
transition to a new payment system: .5% annual updates 2014-2018, followed by a
five-year payment freeze.
- Creation of a new incentive payment program –
the "Merit-Based Incentive Payment System (MIPS). This program will consolidate
three current incentive programs: the Physician Quality Reporting Program, the
Physician Value-Based Payment Program, and the Medicare and Medicaid Electronic
Health Record Incentive Program.
- Under the MIPS, eligible professionals will
receive a composite score of 0-100 based on their performance in four
performance categories, which will be compared to performance threshold. Eligible
professionals with scores above the threshold will receive an incentive
payment, and those below will get a negative adjustment which will be capped.
Negative payment adjustments will fund incentive payments, although the program
will not be budget neutral.
- $500 million per year (2018-2023) will be
made available for additional incentive payments for eligible professionals
with exceptional performance.
- Eligible professionals will be encouraged to
transition to participation in alternative payment models, which will include a
bonus structure (2018-2023). An example of an APM is a medical home, but the
bill establishes a Technical Advisory Committee to review and recommend
physician-developed APMs, an added provision that could help to bring more
specialty specific APMs online.
- The list of criteria for CMS to identify
potentially misvalued services will be expanded to include codes: that account
for a majority of spending under the physician fee schedule; with substantial changes
in procedure time; for which there may be a change in the site of service or a
significant difference in payment between sites of service; services that may
have greater efficiencies when performed together; or with high practice
expenses or high cost supplies.
- The target for identifying misvalued services
is 0.5% of estimated fee schedule expenditures in 2015, 2016, 2017, and 2018.
- The Government Accountability Office is
required to study the AMA/RUC process and for making recommendations on the valuation
of physician services.
- Establishes a program that promotes the use
of appropriate use criteria for advanced diagnostic imaging. The bill does not
include language to give the Secretary authority to expand appropriate use
criteria to other services, including clinical diagnostic laboratory services.
However, the GAO is required to report to Congress regarding other Part B
services to which appropriate use requirements could be applied.
- Click here to download the SGR Repeal and Medicare Provider Payment Modernization Act of 2014.