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.”