SGR repeal: A marked improvement over the status quo

Medicare’s Sustainable Growth Rate (SGR) payment formula has hung like an annual albatross around the necks of physicians, Congress, and medical associations for more than a decade. Finally, we have a realistic opportunity to fling that albatross into the sea.

Three congressional committees — from both the House and the Senate, with both Democratic and Republican support — have crafted the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, which our coalition supports. While we have concerns with aspects of the bill, this legislation represents a marked improvement over the status quo.

The bill represents tremendous progress over previous versions — and we especially appreciate members of the committees listening to the concerns we expressed in December. The bill now:

  • Repeals the SGR immediately. This is critical and long-overdue. The SGR has mandated irrational cuts in physicians’ Medicare payments since 2002.
  • Provides 0.5-percent positive annual payment updates for the next five years. Given that Medicare physician payments have been essentially frozen over the past 12 years — at the same time that practice costs have increased significantly — increases are certainly long overdue. We remain concerned, however, that these increases will in no way keep up with physicians’ cost of providing health care to Medicare patients. We also are concerned with the freeze after 2018 and will certainly work to change this in the future.
  • Rolls several existing and coming “quality incentive” programs into one: the Merit-Based Incentive Payment System (MIPS). The latest bill recognizes that this system cannot be budget-neutral, that additional funding is needed so the MIPS can provide the incentives necessary to achieve the improvements sought. The penalty and bonus pool is an improvement over previous drafts and current law. The bill doubles the funds available to help small practices implement MIPS.
  • Helps to limit the establishment of new causes of action against physicians, which would otherwise add further uncertainty to the management of physicians’ practices.
  • Eliminates some red-tape and hassles that prevent physicians from concentrating on patient care. This includes:
    • Combining the various and confusing incentive and penalty programs into one;
    • Deleting the requirement that physicians submit repeated opt-out affidavits when they want to engage in private contracting with their Medicare patients; and
    • Requiring that electronic health records be interoperable by 2017.

Despite the improvements to the value based program, members of this coalition still have significant concerns with the level of potential penalties that physicians could face in future years. We are particularly concerned for those physicians in smaller practices, many of whom do not and likely will not have the infrastructure in place to be successful in these quality assessment programs.

To use a cliché, the devil is in the details of the quality incentive program. We look forward to working with Congress and the Centers for Medicare & Medicaid Services (CMS) to ensure that practicing physicians are intimately involved in developing and approving the quality, clinical, and payment programs in the legislation. Only practicing physicians can understand exactly how the words on paper will play out in their practices. It is imperative that practicing physicians play a leadership role in developing quality measures, determining how they will be used, and assessing whether the benefit is worth the burden on busy physician practices. Similarly, practicing physicians must serve on the Technical Advisory Committee that reviews and recommends the alternative payment models.

Also, this law will improve Medicare patients’ access to quality care only if additional onerous and expensive regulatory burdens are lifted from their physicians’ backs. Whether in this bill or moving forward, Congress must address:

  • The Oct. 1. drop-dead date for shifting to the massive new ICD-10 coding system. Congress should require CMS to, at a minimum, beta-test this system in a variety of practice settings to make sure it actually works.
  • The bounty-hunting contractors running the Recovery Audit Contractor (RAC) audits. We cannot ignore the growing number of tales of contractors repeatedly harassing physicians’ practices in search of the tiniest of billing errors.

We congratulate the committee chairs and members for a remarkable achievement: consensus on a Medicare physician payment reform proposal. We look forward to working with Congress to make SGR repeal a reality this year.

The Coalition of State Medical Societies consists of the state medical societies in Arizona, California, Florida, Louisiana, New York, North Carolina, Oklahoma, South Carolina, and Texas.

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