Yesterday, the Senate approved a temporary patch to the sustainable growth rate (SGR) payment formula that will prevent Medicare payment cuts for an additional year and delay the implementation of ICD-10 to October 2015. The bill now requires President Obama’s signature to go into effect.
Doctors who are opposed to the proposed temporary fix to the sustainable growth rate (SGR) payment formula (which is set for a Senate vote this afternoon) have said that they would take the 24 percent cut in Medicare payments this year to force Congress to permanently repeal the formula.
The SGR, which determines how much the government pays physicians who treat Medicare patients, has been a concern to physicians since its implementation in the 1990s.
The House of Representatives has reached a deal to delay physician Medicare reimbursement cuts under the SGR formula for one more year. According to the Congressional Budget Office, the cost to repeal the SGR with the ACA delay will total more than $180 billion.
Another bill, which Congress will vote on today, “consolidates Medicare sequester cuts scheduled for 2024, so that they all take place in fiscal year 2024, rather than dividing them between fiscal years 2024 and 2025.” The bill also contains language that would delay ICD-10 implementation until 2015.
Yesterday, bipartisan leaders from the Senate and House announced that they had reached a deal to repeal SGR. The SGR Repeal and Medicare Provider Modernization Act will provide a 0.5% payment update for five years under a fee-for-service model and will also consolidate the physician quality reporting system, electronic health record and value-based modifier programs into a single program. The summary includes that the bill “implements a process to re-base misvalued codes” and “requires development of quality measures in close collaboration with physicians.”
Although encouraged by the bipartisan policy solutions, LTC advocates believe the agreement does not address how Congress would pay for the provisions outlined, nor does it address the offsets needed to pay for the new physician payments. It also does not include a therapy cap relief-a big issue for LTC providers.
Physician groups have been more supportive of the legislation believing it creates incentives for care coordination and expands the use of Medicare data for transparency and quality improvement.
Before Congress’ summer break, The House and Energy Committee voted 51-0 on a bill which will improve the way Medicare pays doctors. One of the bill’s initiatives is to replace sustainable growth rate (SGR) with a system that will pay doctors based on how healthy they keep their patients.
SGR threatens physician pay and has caused frustration among providers and patients. Attempting to get rid of these cuts or “doc fixes” has become an unsuccessful annual event.
Fixing the problem this year seems more feasible because healthcare costs, including Medicare, are growing more slowly than before. However, Medicare is being worked on by three separate committees, two in the House and one in the Senate and the chances of all three agreeing seems doubtful.
Going over the fiscal cliff would result in a 2% cut in payments to Medicare providers and private Medicare Advantage plans under sequestration. And if a “doc fix” isn’t passed along with a fiscal cliff deal, physicians and hospitals would face a 26.5% cut in pay for treating Medicare patients. Other smaller segments of the health industry, such as ambulatory services and rehabilitation therapies, would face cuts, too.
On December 31, a temporary measure known as the “doc fix” will expire, resulting in a 30% decrease in fees to all doctors who treat patients through Medicare as well as active and retired members of the military who are covered under the government’s TRICARE program. If Congress does nothing, doctors will be reimbursed 27% less than current rates, starting January 1, 2013, which could lead to thousands of doctors no longer seeing Medicare patients.
An agreement has been reached that will keep the federal government operating through the first quarter of 2013, but the deal does not include adjusting or repealing the Sustainable Growth Rate (SGR) Medicare payment formula, which recent Congressional Budget Office (CBO) analysis concludes will require a 27% cut in physician payments next year.
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A newly proposed bill in the U.S. House would extend Medicare physician payment rates for one year while legislators work to devise a more manageable alternative to the existing Sustainable Growth Rate formula.
Organized medicine has proposed solutions to Congress for moving past what physicians and policymakers agree is a flawed Medicare payment system by creating opportunities for physicians to participate in new care delivery models.
Members of the House Ways and Means Committee had requested comments on developing alternative pay models to serve as possible replacements for the current Medicare sustainable growth rate formula that helps determine physician pay. The American Medical Association (AMA) was among several physician organizations that responded to specific questions from committee members by detailing ways to overhaul the system while abandoning the Sustainable Growth Rate (SGR).