A permanent solution to Medicare’s troublesome physician payment formula advanced July 23 when a House subcommittee approved a bipartisan proposal to repeal and replace it.
The 70-page draft legislation proposes to repeal Medicare’s sustainable growth rate (SGR) formula and transition to a stable system that is based on rewarding physicians for delivering quality and efficient healthcare to Medicare patients.
[See also: Another crack at SGR]
The House Energy and Commerce Committee’s Subcommittee on Health’s voice vote moves the proposed legislation to the full committee, which is expected to consider the bill before lawmakers’ month-long August recess.
In the first phase of a new proposed system, Medicare would annually update payments by 0.5 percent from 2014 through 2018 to help providers transition to reporting quality measures.
Starting in 2019, physicians continuing to practice in the traditional fee-for-service model would receive through an updated incentive program an additional 1 percent bonus for meeting quality measures and clinical practice improvements. The payments of low performers would be reduced 1 percent.
Providers not reporting any quality information or not participating in an alternative payment model, such as patient-centered medical homes, would have their payments cut by 3 percent, which incorporates the reduction in payment under the Physician Quality Reporting System for non-participation.
[See also: SGR deal to postpone doctor payment cut for 10 months]
"The time of temporary fixes and kicking the can down the road has ended," said Rep. Joe Pitts (R-Pa.), chairman of the health subcommittee and co-sponsor of the legislation, in a news release after the vote. “The bipartisan committee draft we approved today permanently repeals the SGR and places us on a path to paying for innovation and quality, not volume of services, and puts doctors, not bureaucrats, back in charge of medicine.”
House Energy and Commerce Committee ranking Democrat, Rep. Henry Waxman (D-Calif.), a co-sponsor of the bill, called the legislation a “work in progress” in a statement.
Although lawmakers have made progress with this proposal, they have not figured out how to pay for it. The Congressional Budget Office has estimated the cost of repealing SGR at about $138 billion over 10 years.
Congress has repeatedly prevented Medicare reimbursement rate cuts under SGR with a temporary “doc fix,” the latest of which expires in January when a 25 percent cut will take effect.
The committee has sought feedback from healthcare organizations to help fill out the details of the bill and has received support and additional recommendations from 19 groups, including from the American College of Physicians (ACP), National Committee for Quality Assurance and Premier Healthcare Alliance.
In a letter to the committee, ACP President Molly Cooke MD, said that the initial period of regular payment increases was important for stability but Congress must monitor any potential impact the proposed update amount may have on patient access.
And while the American Academy of Family Physicians (AAFP) said in a statement that it supports the draft legislation, AAFP’s president, Jeffrey Cain, MD, expressed “disappointment” that the draft legislation doesn’t specify a higher base payment rate for services provided by primary care physicians.
[See also: House bill to repeal SGR gets broad backing]