SGR Repeal and Medicare Provider Payment Modernization Act
Although they have not yet determined how it will be paid for, the House (bill referred to Committee on Energy and Commerce et al) and Senate (bill referred to Senate Finance) have agreed on a permanent fix to the sustainable growth rate (SGR) formula that sets physician payment in the Medicare program. Under the deal Medicare will increase the amount it pays physicians by 0.5% each year for the next five years. The plan provides financial incentives for healthcare providers to participate in tests of alternative payment models (APMs). The deal also includes offers of bonuses to providers that agree to have their reimbursements based more on outcomes than on the volume of services they provide. The bill would also consolidate 3 different Medicare incentive programs, including the one for meaningful use of an electronic health record system (EHR).
Starting in 2018, payments under the new system would be adjusted based on performance in the new incentive system, the Merit-Based Incentive Payment System (MIPS), which consolidates three incentive programs: the Physician Quality Reporting System (PQRS), which provides incentives for physicians to report on the quality of care measures; the Value-Based Payment Modifier, which adjusts payment based on quality use of resources; and meaningful use of electronic health records. MIPS will assess performance in four categories:
- Quality - In addition to measures used in the existing quality performance programs (PQRS, VBM, EHR MU) HHS will develop additional measures. Measures used by qualified clinical data registries may also be used to assess performance under this category.
- Resource Use - The resource use category will include measures used in the current VBM program.
- Meaningful Use - Current EHR meaningful use requirements, demonstrated by use of a certified system, will continue to apply in order to receive credit towards incentives in the new system. However, to prevent duplicative reporting, professionals who report quality measures through certified EHR systems for the MIPS quality category are deemed to meet the meaningful use clinical quality measure component.
- Clinical Practice Improvement Activities - Professionals will be assessed on their effort to engage in clinical practice improvement activities. Incorporation of this new component gives credit to professionals working to improve their practices and facilitates future participation in APMs.
There is flexibility to participate in MIPS in a way that best suits a particular practice environment. These options could include: use of EHRs, use of qualified clinical data registries maintained by physician specialty organizations, and the option to be assessed as a group, as a “virtual” group, or with an affiliated hospital or facility. Technical assistance would also be available to help practices with 15 or fewer professionals improve MIPS performance or transition to APMs. Overall, there will be very strong incentives to participate in APMs.
This bill will consolidate plans proposed last year by the Senate Finance, House Ways and Means, and House Energy and Commerce committees. How to pay for this new plan is still a big task ahead, although there seems to be enough momentum behind the effort to get this done. With the 0.5 percent increase, the cost for the SGR repeal comes to about $125 billion over 10 years, according to the Congressional Budget Office. A powerful array of provider organizations have expressed strong support including:
- The American Medical Association
- The American College of Physicians
- American Academy of Family Physicians