Congress Takes Giant Step Toward Repeal of Medicare SGR

At a time when Republicans and Democrats, House and Senate, can’t seem to agree on anything, Medicare physician payment reform is the exception to the rule.  Today, the House Ways and Means and Senate Finance committees reported out nearly identical bills to repeal the Medicare SGR formula and begin to move Medicare more rapidly toward paying physicians based on quality improvement activities–the closest Congress has ever gotten to reaching a bipartisan, bicameral accord on permanently repealing the SGR.

Today’s action is not the end of the story, though.  The House recesses on Friday for its annual holiday break and the Senate will recess next week.  When Congress returns in January, the House must first reconcile the Ways and Means bill with an earlier (but similar in many respects) bill approved unanimously in July by the House Energy and Commerce Committee, which shares jurisdiction with Ways and Means on Medicare physician payment issues. Then, the House and Senate must reach agreement on an identical bill that can pass both chambers.  And perhaps the biggest hurdle is to find about $120 billion in offsets (cuts or higher fees to someone else) to pay for it all–a difficult task that will test the fragile bipartisanship that has gotten Congress to this point. 

In the meantime, Congress was also expected to pass a three month bridge to prevent the near 25% SGR cut scheduled for January 1, 2014–replacing it with a 0.5% update through March 31, 2014.  The thinking is that this will give Congress time to wrap up agreement on the permanent SGR legislation and budget offsets during the first quarter of next year.

ACP supports the bills approved today, even as we will continue to seek improvements.  We had a direct hand in developing many of the policies behind them, getting positive changes in them throughout the process, and rounding up votes for them. We organized coalition letters with AAFP and AOA, and the Internal Medicine coalition letter. 

The bills are not perfect–what is?  We haven’t gotten everything we want–who does? But compared to current law–which has resulted in scheduled (and growing) cuts year after year, for more than a decade now–the bills reported out today are a huge improvement.  Here are ten reasons why. The bills:

1. End the SGR cuts forever.
2. Add $140 billon to physician pay over the next 10 years.
3. Cancel the 2016 PQRS Meaningful Use penalties.
4. Provide a 5% bonus to physicians in new alternative payment models, such as PCMHs and ACOs.
5. Create options for physicians to earn positive updates for participating in a new Value-based payment program.
6. Combine and harmonize the existing Medicare PQRS, Meaningful Use, and Medicare Value Modifier Index into a single VBP reporting program.
7. Establish a process to improve the accuracy of relative value units (RVUs).
8. Provide funding to help smaller practices successfully participate in the new value-based payment program or in alternative payment models.
9. Increase federal funding for development of quality measures
10. Helps ensure that Medicare patients will continue to have access to physicians, the most of all the changes it makes from current law.

And finally, there is now a chance that 2014 will finally be the year that we can move on from constantly having to re-fight the SGR battle, so we can concentrate on other things–like addressing administrative requirements that take time away from the patient-physician relationship.  Now, wouldn’t that make for a happy new year?

Today’s question: What is your reaction to the steps Congress took today to enact permanent repeal of the Medicare SGR?