Physician payment bill advances through House committee

The House Energy and Commerce Committee on July 31 approved legislation to repeal and replace the sustainable growth rate (SGR) formula, moving another step closer to a more stable Medicare physician payment system based on delivering quality and efficient care instead of 11th-hour fixes.

The bill moves to consideration by the full House of Representatives. Meanwhile, Congress adjourns Aug. 2 for its annual recess and won’t be back to work until Sept. 6.

[See also: Latest 'doc fix' moving forward]

The Energy and Commerce Committee voted 51-0 to advance the Medicare Patient Access and Quality Improvement Act, H.R. 2810, but it still does not contain a funding method. Rep. Fred Upton (R-Mich.), committee chairman, said in a statement that the bipartisan supporters “…are all resolved to achieve reform in a fiscally responsible manner.”

Congress has repeatedly prevented Medicare reimbursement rate cuts under SGR from taking effect with a temporary “doc fix.” But there is no certainty that this legislation might become law in time to avert a 25 percent cut in physician payments that will drop in January when the latest temporary measure expires.

The 72-page bill preserves an enhanced fee-for-service, repeals the SGR and provides for a period of payment transition. The vote out of committee was “…yet another important step forward in an extremely collaborative and transparent process,” said Rep. Michael Burgess (R-Tex.), a physician and lead sponsor of the legislation, in a statement.

The new system would roll out in phases. First, Medicare would increase payments 0.5 percent annually from 2014 through 2018 as providers transition to reporting of quality measures.

[See also: Another crack at SGR]

In 2019, physicians practicing in fee-for-service would receive an additional 1 percent bonus based on performing quality measures and clinical practice improvements through an updated incentive program. The payments of low performing physicians would be decreased 1 percent.

Providers may leave the fee-for-service system and opt instead for alternative payment models, including patient-centered medical homes, accountable care models, bundled payments for episodes of care, or a transparent process toward another model.

The Congressional Budget Office has estimated the cost of repealing the SGR at about $138 billion over 10 years. H.R. 2810 provides for $100 million being used from the Medicare Federal Supplementary Medical Insurance Trust Fund to help pay for the infrastructure needed and $1 million annually toward provider incentives.

The Bipartisan Policy Center said that not only was the committee developing a long-term payment system but using it to improve quality, value and care coordination in Medicare. However, Katherine Hayes, the center’s director of health policy, said in a statement that lawmakers need to continue their bipartisanship as the bill moves to the House floor, “particularly as potentially contentious policies are added to offset the costs of the bill.”