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Medicare's SGR Formula Moves One Step Closer to Repeal
Congressional committees agree on bill to reform reimbursement system, eliciting hope from ACP officials
Agreement on a bill to repeal the Sustainable Growth Rate payment system has been reached by key congressional committees, relieving physicians of the uncertainty and confusion surrounding reimbursements for treatment provided through Medicare.
"This is a huge advancement for doctors," said Dr. Charles Cutler, who chairs the American College of Physicians Board of Regents. "While there's extreme polarization in Washington, D.C., that exists on virtually any and every topic, here it's a situation where there's agreement between Democrats and Republicans, between the Senate and the House."
The House Energy & Commerce and Ways & Means Committees and the Senate Finance Committee agreed Feb. 6 on a plan that do away with the SGR formula, streamline reporting programs that have been a burden on physicians, create incentives for physicians who embrace alternative payment models and expand the use of Medicare data to encourage transparency and quality improvement.
Bob Doherty, ACP's senior vice president for governmental affairs and public policy, said that the College is working with Congress to get the bill to the president no later than the end of March to prevent a scheduled cut in Medicare reimbursements of almost 24 percent on April 1.
"The college strongly opposes another temporary patch or freeze," Doherty said, referring to the annual ritual for more than a decade of Congress postponing a permanent resolution of problems with the SGR payment system. "With agreement having been reached on a bipartisan, bicameral bill to reform Medicare physician payments and repeal the SGR, there is no reason for Congress to put off acting now to send real reform to the president for his signature."
Doherty and Cutler noted that ACP is encouraging its members to lobby their representatives in Congress to support the legislation.
Other major medical groups, including the American Medical Association and the American College of Surgeons, have also expressed support for the reform plan, along with dozens of state medical societies and national specialty organizations.
In the big picture, the proposed legislation would do several things that would benefit physicians, especially those with larger numbers of patients on Medicare. Most importantly, Cutler said, would be repealing of the SGR, which "takes away the threat of a Medicare cut of more than 25 percent at the end of March" and replaces it with five years of 0.5 percent payment increases.
He said that the instability inherent with the SGR system has plagued doctors every year. "When you're looking at a huge cut, it makes it very difficult to do financial planning for your office," Cutler said. "How do you know how many staff or how much new equipment you can afford when it's possible in the near future that Medicare is going to cut your professional fees as much as 25 percent?"
As its name implies, the proposed legislation -- known as the SGR Repeal and Medicare Provider Payment Modernization Act -- goes beyond a simple repeal of the current system. ACP officials see it as more of a global overhaul that will create a system that it believes is based on quality, value and accountability.
"It begins to recognize good care, high-quality care," Cutler said. "If you're a doctor who's doing the right thing and providing high-quality care, you'll be rewarded. There will be incentive payments if you can demonstrate that your practice provides quality to patients."
Questions do remain, however, including the matter of how much the reform will cost over the next few years, now estimated at $126 billion. ACP has not weighed in on where the funding should come from, leaving that for elected representatives to figure out. "I don't think that any doctor understands the federal budget well enough to really comment intelligently on how to pay for it," Cutler said.
Also, some doctors have expressed concern about the small amount of the annual payment increases. "We would have preferred higher baseline annual updates," Doherty said, "but the budget cost makes this impossible at the current time."
As a practical matter, he and Cutler noted that the current proposal may be the only deal that can win bipartisan approval in the bitterly divided world of national politics.
"We're close, closer than we've ever been before," to resolving the Medicare payment issues, Cutler said. "We'll look back in a few years and think it should have been done earlier."
February 20, 2014
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On Fri. Mar. 31, Examining the Rise in Prescription Drug Pricing and Costs (9:30am-10:30, Rm 1).
On Sat. Apr. 1, 60 Minutes: Special Report on Hot Issues in Health Policy (9:30am-10:30, Rm 8), Climate Change: The Health Perspective (4:00pm-5:00, Rm 2).
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On Thur. Mar. 30: Looking Towards 2020: New Care Delivery Models Enabled by Existing and Near Future Technology (11:15am-12:45, Rm 7),
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