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Credit: Lawrence Jackson
Leaders from the US Senate and House of Representatives have agreed on a plan to replace the Medicare sustainable growth rate (SGR) formula, but they must still agree on how to pay for it.
The group’s bill, called the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, would remove the threat of a 23.7% cut in Medicare payments that is set to take effect on April 1.
And it would provide annual payment updates of 0.5% for the next 5 years, as Medicare transitions to a payment system designed to reward physicians based on care quality, not quantity.
“This is a significant step forward in our long-standing effort to replace the flawed physician update formula with a 21st-century system focused on quality and value rather than the quantity of services,” said House Ways and Means Committee Ranking Member Sander Levin (D-Mich.).
“For the first time in many years, we have agreement among the bipartisan leadership of the 3 committees that oversee Medicare. Now, we have to turn to the thorny issue of offsets.”
The Congressional Budget Office has estimated that the new plan would increase direct spending by $150.4 billion from 2014 to 2023, although other sources have said the cost would be about $126 billion for the same time period.
Repealing the SGR
The SGR calls for annual, automatic cuts in Medicare payments to physicians. It was established in 1997 to control physician spending, but, over the years, the necessary cuts have not occurred.
Since 2003, Congress has spent about $150 billion to provide short-term fixes to spare physicians from the cuts. Without another short-term fix or legislation to permanently eliminate the SGR, physicians would see a 23.7% cut in Medicare payments starting April 1.
For years, Congress has been trying to eliminate the SGR, but agreeing on a plan to do so—and a way to pay for it—has proven difficult. Now, Congress says it has brought “renewed commitment to repealing and replacing the flawed SGR update mechanism.”
Provisions of the bill
The SGR Repeal and Medicare Provider Payment Modernization Act of 2014 would institute a 0.5% annual payment increase for physicians from 2014 through 2018. According to Congress, this would help the transition to a merit-based incentive payment system (MIPS), beginning in 2018.
The MIPS consolidates the 3 existing incentive programs—the Physician Quality Reporting System, the Value-Based Payment Modifier, and the Meaningful Use of Electronic Health Records—into a single program that would reward providers who meet performance thresholds.
The bill would also give a 5% bonus to providers who receive a significant portion of their revenue from an alternative payment model (APM) or patient-centered medical home (PCMH). Participants would need to receive at least 25% of their Medicare revenue through an APM in 2018-2019, and this threshold would increase over time.
The bill would provide incentives for participation in private-payer APMs as well. And it would establish a technical advisory committee to review and recommend physician-developed APMs based on criteria developed through an open-comment process.
Finally, the bill would expand the use of Medicare data. Quality and utilization data would be posted on the Physician Compare website with the goal of helping patients to make more informed decisions about their care.
Furthermore, “qualified entities” would be allowed to provide analyses and underlying data to providers, although this provision is subject to privacy and security laws. And qualified clinical data registries would be allowed to purchase claims data.
To read the bill in full, visit Congress.gov. 
Credit: Lawrence Jackson
Leaders from the US Senate and House of Representatives have agreed on a plan to replace the Medicare sustainable growth rate (SGR) formula, but they must still agree on how to pay for it.
The group’s bill, called the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, would remove the threat of a 23.7% cut in Medicare payments that is set to take effect on April 1.
And it would provide annual payment updates of 0.5% for the next 5 years, as Medicare transitions to a payment system designed to reward physicians based on care quality, not quantity.
“This is a significant step forward in our long-standing effort to replace the flawed physician update formula with a 21st-century system focused on quality and value rather than the quantity of services,” said House Ways and Means Committee Ranking Member Sander Levin (D-Mich.).
“For the first time in many years, we have agreement among the bipartisan leadership of the 3 committees that oversee Medicare. Now, we have to turn to the thorny issue of offsets.”
The Congressional Budget Office has estimated that the new plan would increase direct spending by $150.4 billion from 2014 to 2023, although other sources have said the cost would be about $126 billion for the same time period.
Repealing the SGR
The SGR calls for annual, automatic cuts in Medicare payments to physicians. It was established in 1997 to control physician spending, but, over the years, the necessary cuts have not occurred.
Since 2003, Congress has spent about $150 billion to provide short-term fixes to spare physicians from the cuts. Without another short-term fix or legislation to permanently eliminate the SGR, physicians would see a 23.7% cut in Medicare payments starting April 1.
For years, Congress has been trying to eliminate the SGR, but agreeing on a plan to do so—and a way to pay for it—has proven difficult. Now, Congress says it has brought “renewed commitment to repealing and replacing the flawed SGR update mechanism.”
Provisions of the bill
The SGR Repeal and Medicare Provider Payment Modernization Act of 2014 would institute a 0.5% annual payment increase for physicians from 2014 through 2018. According to Congress, this would help the transition to a merit-based incentive payment system (MIPS), beginning in 2018.
The MIPS consolidates the 3 existing incentive programs—the Physician Quality Reporting System, the Value-Based Payment Modifier, and the Meaningful Use of Electronic Health Records—into a single program that would reward providers who meet performance thresholds.
The bill would also give a 5% bonus to providers who receive a significant portion of their revenue from an alternative payment model (APM) or patient-centered medical home (PCMH). Participants would need to receive at least 25% of their Medicare revenue through an APM in 2018-2019, and this threshold would increase over time.
The bill would provide incentives for participation in private-payer APMs as well. And it would establish a technical advisory committee to review and recommend physician-developed APMs based on criteria developed through an open-comment process.
Finally, the bill would expand the use of Medicare data. Quality and utilization data would be posted on the Physician Compare website with the goal of helping patients to make more informed decisions about their care.
Furthermore, “qualified entities” would be allowed to provide analyses and underlying data to providers, although this provision is subject to privacy and security laws. And qualified clinical data registries would be allowed to purchase claims data.
To read the bill in full, visit Congress.gov.
Credit: Lawrence Jackson
Leaders from the US Senate and House of Representatives have agreed on a plan to replace the Medicare sustainable growth rate (SGR) formula, but they must still agree on how to pay for it.
The group’s bill, called the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, would remove the threat of a 23.7% cut in Medicare payments that is set to take effect on April 1.
And it would provide annual payment updates of 0.5% for the next 5 years, as Medicare transitions to a payment system designed to reward physicians based on care quality, not quantity.
“This is a significant step forward in our long-standing effort to replace the flawed physician update formula with a 21st-century system focused on quality and value rather than the quantity of services,” said House Ways and Means Committee Ranking Member Sander Levin (D-Mich.).
“For the first time in many years, we have agreement among the bipartisan leadership of the 3 committees that oversee Medicare. Now, we have to turn to the thorny issue of offsets.”
The Congressional Budget Office has estimated that the new plan would increase direct spending by $150.4 billion from 2014 to 2023, although other sources have said the cost would be about $126 billion for the same time period.
Repealing the SGR
The SGR calls for annual, automatic cuts in Medicare payments to physicians. It was established in 1997 to control physician spending, but, over the years, the necessary cuts have not occurred.
Since 2003, Congress has spent about $150 billion to provide short-term fixes to spare physicians from the cuts. Without another short-term fix or legislation to permanently eliminate the SGR, physicians would see a 23.7% cut in Medicare payments starting April 1.
For years, Congress has been trying to eliminate the SGR, but agreeing on a plan to do so—and a way to pay for it—has proven difficult. Now, Congress says it has brought “renewed commitment to repealing and replacing the flawed SGR update mechanism.”
Provisions of the bill
The SGR Repeal and Medicare Provider Payment Modernization Act of 2014 would institute a 0.5% annual payment increase for physicians from 2014 through 2018. According to Congress, this would help the transition to a merit-based incentive payment system (MIPS), beginning in 2018.
The MIPS consolidates the 3 existing incentive programs—the Physician Quality Reporting System, the Value-Based Payment Modifier, and the Meaningful Use of Electronic Health Records—into a single program that would reward providers who meet performance thresholds.
The bill would also give a 5% bonus to providers who receive a significant portion of their revenue from an alternative payment model (APM) or patient-centered medical home (PCMH). Participants would need to receive at least 25% of their Medicare revenue through an APM in 2018-2019, and this threshold would increase over time.
The bill would provide incentives for participation in private-payer APMs as well. And it would establish a technical advisory committee to review and recommend physician-developed APMs based on criteria developed through an open-comment process.
Finally, the bill would expand the use of Medicare data. Quality and utilization data would be posted on the Physician Compare website with the goal of helping patients to make more informed decisions about their care.
Furthermore, “qualified entities” would be allowed to provide analyses and underlying data to providers, although this provision is subject to privacy and security laws. And qualified clinical data registries would be allowed to purchase claims data.
To read the bill in full, visit Congress.gov.