On December 5, the Senate Finance Committee and House Ways and Means Committee released a modified version of their bipartisan and bicameral proposal to repeal and replace the Medicare Sustainable Growth Rate (SGR) formula. This modified proposal reflects the Committees' review of 242 comments they received about their original proposal from stakeholders including the American Society of Anesthesiologists' (ASA) comments.
Like the original version, the Committees' modified proposal permanently repeals the current flawed SGR formula and creates a new mechanism for physician payments.
The modified proposal maintains a 10 year, zero percent update for Medicare payments – a 10 year payment freeze. Citing anesthesiology's already low payment rates, ASA had sought "the addition of an inflation adjustment to the 10-year freeze as a mechanism to ensure that the value of payment remains constant."
Additionally, the modified Committees' proposal maintains the onerous budget-neutral Value-Based Performance (VBP) Program - a "tournament" style quality incentive initiative. Under this initiative, no new funds are available for physicians who earn increased payments for successful participation in the program. Instead, the bonus payments for "winning" physicians are paid for by payment penalties for "losing" physicians.
The modified proposal also reduces the relative value target for finding misvalued services in the original proposal from 1 percent to 0.5 percent from 2015-2018 and stated that any savings found in excess of the target could be applied toward the following year's target. Additionally, the modified proposal removed the 10 percent penalty for failing to provide requested information to the Centers for Medicare & Medicaid Services (CMS).
Other changes included a one-year extension of the Alternative Payment Model (APM) program to 2017.
The draft also includes requirements for several studies including from the Medicare Payment Advisory Commission (MedPAC), which would study the relationship between professional spending and utilization of Medicare services under Part B; a Government Accountability Office (GAO) report which would evaluate the VBP in 2018 and 2021; and a GAO report to Congress on the alignment of quality measures for government and private payers, which also makes recommendations on how to reduce professional administrative burden.
UPDATE: ASA JOINS 14 MEDICAL SPECIALTY PARTNERS IN OPPOSING DRAFT LEGISLATION
On Tuesday, December 10, ASA joined Surgical Coalition partners in a letter opposing this draft legislation. The coalition letter cited concern that the draft legislation focuses on reducing payment to physicians rather than on effective health policy. Specifically, it cited opposition to the proposed 10 year payment freeze and inclusion of a budget-neutral Value-Based Perform Program (VBP). The VPB includes no new funding and instead relies upon a "tournament" style program that pays bonuses to some physicians by drawing from the pool of payment penalties to other physicians.
While opposing the current draft legislation, the coalition letter did note appreciation for the committees' "collaborative effort and commitment to permanently repeal the sustainable growth rate formula" and to replace it with a model that "rewards high quality, efficient health care."
A full listing of the proposal changes is available in the Committees' "Modifications to the October 30 Bipartisan, Bicameral Discussion Draft to Repeal the SGR and Reform Medicare Physician Payment" document.
Earlier this year, the House Energy and Commerce Committee considered a proposal to repeal and replace the SGR, H.R. 2810, the Medicare Patient Access and Quality Improvement Act of 2013. The Committee reported the bill out favorably by a vote of 51-0.
SGR PATCH EXPECTED:
As part of the recently struck Congressional budget deal, a 3-month SGR patch with a half percentage point payment update that will last until March 31, 2014. Congress is expected to vote on the deal shortly.
ASA is closely reviewing this revised proposal and monitoring all efforts to repeal and replace the SGR.
Review the Coalition Letter to the Senate Finance Committee.
Review the Coalition Letter to the House Ways and Means Committee.
Review the Senate Finance Committee Section by Section Summary.
Review the House Ways and Means Committee Section by Section Summary.
Review the Committees' Modified Proposal Document.
Review ASA's Recommendations to the Original Proposal.
Review the Committees' Joint Press Release on the Original Proposal.
Review the Committees' Original Framework Document.
Review the Committees' Original FAQ.
Review the Committees' Overview of Current Law Physician Reporting/Incentive Systems.
Information about H.R. 2810, Medicare Patient Access and Quality Improvement Act of 2013.