The ACP Advocate Blog

by Bob Doherty

Friday, March 27, 2015

When it comes to SGR repeal, is the glass half empty? Or half full?

Actually, it’s both.  On the “it’s half full” side, the House of Representatives yesterday overwhelmingly voted for legislation to repeal the SGR and make other improvements in Medicare physician payments.  On the it’s “half empty” side, the Senate recessed for two weeks without taking action on the House bill, the Medicare Access and CHIP Reauthorization Act of 2015, H.R. 2, meaning that a 21% SGR Medicare physician payment cut will go into effect as scheduled on April 1, even though physicians won’t begin seeing the cut until April 15 (more on that later).

More on the half full side:

What the House did defied expectations—passing expensive, complicated, and one might have expected, controversial legislation making huge changes in the popular Medicare program, by a lopsided and bipartisan majority of 392-37.  The Washington Post reports that such a “Kumbaya” moment, when the two political parties vote together to get legislation passed, is exceedingly rare in “our modern, polarized era.”  Why did the SGR bill get so much bipartisan support?  For one thing, it was directly based on a bipartisan and bicameral bill that both parties and both chambers had agreed to last year, only to falter on the question of how to pay for it.  But because there already was agreement on the underlying policies, the House did not have to start from scratch this year on crafting a bill that both parties could support.

What really put it over the top, though, was the decision by Speaker John Boehner and ranking Democrat Nancy Pelosi to hash out an agreement on how to partially pay for it—partially being the operative word.  Had either insisted that it be fully paid for, it would have been near impossible to agree on enough budget savings that both parties could agree on.  

Like all compromises, the agreement had some things that both Speaker Boehner and Minority Leader Pelosi could take back as “wins” to their respective caucuses.  Boehner was able to talk up “entitlement reforms” in the bill that over time will require higher income beneficiaries to pay more for Medicare Parts B and D and apply a $250 deductible to Medigap plans.  Pelosi was able to talk up provisions in the bill that provide permanent funding for a program that lowers Medicare premiums for poorer beneficiaries, and  two years of funding for the Children’s Health Insurance Program, Community Health Centers, the National Health Service Corps, and GME Teaching Health Centers.  

The bill also had unprecedented support from stakeholders of all varieties, from more than 750 physician membership organizations (including ACP), from hospitals, from nurses, from consumer groups, from nursing homes, and many more.

Following the House vote, ACP issued a statement congratulating Speaker Boehner and Minority Leader Pelosi, along with the 392 representatives who voted for it, and urging the Senate to pass it before recessing today.

Now, for the glass half empty side.  Just like it takes two to tango, it takes both chambers of Congress to pass a law.  The House did its part, the Senate did not.  Instead, the Senate recessed at 3:30 this morning without taking any action on the House bill.  Both Majority Leader McConnell and Minority Leader Reid promised that the bill would be taken up “quickly” after the Senate’s return on April 13, but there is reason for physicians to be concerned that they will not act in time to avert a 21% SGR cut for services provided on or after April 1.  Because Medicare holds claims for 10 business days before paying them, the 21% SGR cut will begin to be applied on April 15 for physician services provided to Medicare enrollees on and after April 1. But because the Senate will not return from the recess until April 13, it will have fewer than 48 hours to enact H.R. 2 before the 21% cut will begin to directly affect payments to physicians for services provided to Medicare enrollees.

The cut would then continue until the House and Senate both pass identical bills to stop the cut and repeal the SGR, which could take days, maybe longer.   If, on the other hand, the Senate joins the House and enacts H.R. 2 immediately upon its return, and without making changes in the bill from the House-passed version that would delay enactment, Congress can still repeal the SGR in time to stop the 21% cut from actually affecting payments to physicians.

The Senate could have prevented all of this uncertainty if it had just passed the House bill before taking two weeks off, but it didn't.  ACP, in a release issued a few hours ago, expressed great disappointment with the Senate’s failure to take up the House bill and advised them that physicians and patients would hold their Senators accountable.

For that, we will need every physician to help us, by calling your Senators.  Insist that they commit to voting for H.R. 2 immediately upon return on April 13 from the recess, and before the cut begins to show up in your payments fewer than two days later.  They will be heavily lobbied from the right and the left by groups that don’t like some of the policies in the bill, and their efforts need to be countered by the physician community.

Otherwise, we will end up with an empty glass, drained by empty SGR repeal promises made by a Congress that, once again, will have failed to deliver the votes that were needed.

Today’s question: What will you do to hold your Senators accountable?

Tuesday, March 24, 2015

More on the SGR bill: beyond repeal, what else is in it?

As I mentioned in my most recent blog post, only 5 of the 158 pages in the bill being voted on by  the House of Representatives later this week has to do with repealing the SGR and providing positive fee-for-service (FFS) updates to physicians.  The rest has to do with creating a framework for Medicare to encourage physicians to participate in quality improvement activities and in alternative payment models.  This has resulted in some physicians asking, with skepticism, what else is in the bill?  Why should doctors support it?

Last year, my colleague Shari Erickson and I came up with a list of 12 reasons why last year’s bicameral and bipartisan SGR bill, which in almost all respects is the same as this year’s House bill, deserved physicians’ support.  Here is the list, reprised and updated:

1. After 11 years, 17 patches, and more than $154 billion wasted.  It is time to pass SGR-repeal now!
2. The bill establishes stable positive updates during a transition period: annual updates of 0.5 percent starting on July 1, 2015 through the end of 2019.  The rates in 2019 will be maintained through 2025, while providing professionals with the opportunity to receive additional payment adjustments through a new Merit-Based Incentive Payment System (MIPS), as discussed below. While the half percent annual update admittedly should have been higher (ACP urged more, but this is the most Congress would agree to spend), it’s much better than a 24% SGR cut on April 1—which all in probability would have been followed by more patches with rates frozen indefinitely, year after year, as far as the eye could see.

3. Starting in 2019, the existing Medicare quality reporting/incentive programs (PQRS, Value Based Modifier, and Meaningful Use) — which vary significantly in terms of measures, data submission options, and payment timelines — would be consolidated into one single quality improvement program, the Merit-Based Incentive Payment System (MIPS), reducing the significant confusion and hassles now associated with the current three separate reporting programs. Under MIPS, physicians would get a single annual composite score, with an established range of positive or negative updates based on their score, derived from performance in four domains: clinical performance, meaningful use, practice improvement, and efficiency/effectiveness of care, both in terms of their performance compared to their peers and their own relative improvement compared to their own previous year’s score.

4. The new MIPS composite score would allow physicians to more clearly determine their eligibility for incentive payments.  In essence, it empowers physicians to set their own individual conversion factor, rather than having it determined by a flawed formula or other external approach.  Physicians will be able to proactively review their data in order to set their performance goals.  The current Medicare reporting programs are not at all clear, transparent, or aligned in terms of performance thresholds that must be met.

5. Under current law, in 2019, physicians are faced with:
•    2 percent penalty for failure to report PQRS quality measures;
•    5 percent penalty for failure to meet EHR MU requirements; and
•    Additional negative adjustments under the Value-based Modifier (VBM) program

All of which could add up to 7-10 percent cuts in 2019.  However, the new MIPS program aligns all of those incentive payments and caps them at more reasonable limits in the early years (no more than 4% in 2019), which gradually increase over time to no more than 9% in 2022.

6. This legislation keeps the money from the existing PQRS and Meaningful Use incentive program penalties (in 2019 and beyond) in the physician payment pool; therefore, significantly increasing the total funds available to pay physicians.  This is because, starting in 2019, the bill eliminates the two percent penalty for failure to report PQRS quality measures and the 5 percent penalty for failure to meet EHR meaningful use requirements.  Instead, the money CMS would have collected from these penalties would remain in the physician fee schedule, significantly increasing total payments compared to the current law baseline.  This money would be lost to physicians if the current system remains in place.

7. In the current Medicare reporting/incentive programs, physicians receive little to no incentive payment for engaging in clinical improvement activities.  And there is currently no ability for physicians to get credit for transforming to a PCMH under the current programs.  The MIPS program would change that and give credit for overall improvement from year to year, as well as for engaging in specific clinical improvement activities.  In particular, physicians in certified Patient-Centered Medical Homes would automatically get the highest clinical improvement score, which would be 15% of the total MIPS composite score.

8. On top of the base positive incentive payments that high performing physicians would receive in the MIPS program, they can also receive additional payment.  In aggregate, this additional payment would be up to $500 million per year from 2018 to 2023.  This new money does not exist within the current Medicare reporting/incentive programs.

9. Additional new money is also allocated specifically to help small practices ($20 million).  There is currently no funding assistance available for the Medicare reporting programs and very limited assistance available for Alternative Payment Model (APM) transition (mostly limited to practices participating in CMS Innovation Center projects).

10. Those physicians participating in APMs would also receive a 5 percent bonus each year from 2018 through 2023—this is entirely new funding and is on top of any current payment structures that are part of their APM (e.g., prospective care coordination fees, shared savings, etc.).

11. Through its incentives for APMs, this bill would allow for a more rapid and robust expansion of the PCMH and PCMH specialty practices (and other evidence-based models) throughout all of Medicare.  Physicians would have the opportunity to propose additional APMs suitable for their specialties, states, and patient care characteristics and mix.

12. Additionally, current law does not require payment for the management of individuals with chronic conditions.  CMS recently finalized via rulemaking payment for chronic care management that began in 2015.  This bill would put the weight of law behind paying for a chronic care management code (or codes) rather than leaving it to agency discretion.

So to recap: the House bill repeals the SGR and replaces its 24% SGR cut with positive updates, putting hundreds of billions back into the physician payment system above the current baseline.  It simplifies and consolidates existing reporting programs into one program.  It gives physicians more control over their annual updates.  It puts additional money, beyond SGR repeal, into the physician payment system by canceling 2019 PQRS and Meaningful Use penalties and by allocating $500 million to the top quality performers. It creates multiple opportunities for physicians to qualify for higher payments for successfully reporting on quality measures or by participating in alternative payment models like PCMHs.   For all of these reasons, and others, it has earned the support of ACP—and more than 750 physician membership organizations.

Now, let’s close the deal by urging Congress to pass the SGR Repeal and Medicare Provider Modernization Act, this week, without delay, before the 21% SGR cut occurs on April 1.

Today’s question: What have you done to urge your Representative to pass this bill?

Friday, March 20, 2015

SGR repeal isn’t a “doc fix”; it’s about fixing Medicare for good of patients

Members of Congress and the news media have a bad habit of referring to efforts to stop Medicare from arbitrarily cutting payments to physicians for taking care of their patients as the “Doc Fix.”  Typical is this story from CNN—“Bipartisan Love: Boehner, Pelosi strike deal to kick doc fix”—that reported on the release yesterday of an agreement between the two leaders on a bill to repeal the Medicare SGR formula, which I also covered in my blog post yesterday.

Calling SGR repeal the “Doc Fix” creates the impression that it’s a self-serving bill to benefit an influential group at the expense of others.  (Think about how’d you react if you read that a bill was an “oil company fix” or "tobacco industry fix”—you’d suspect the rest of us were being taken for a ride, which would probably be true).

Saying it’s a “Doc fix” makes the issue unnecessarily polarizing, because it implies that if Congress votes for permanent SGR repeal, it’s putting doctors ahead of a more deserving  group, like kids covered under the Children’s Health Insurance Program, when both are about improving access for patients, old and young.  (SGR repeal has become linked to CHIP, because the House leadership agreement permanently repeals the SGR, while it reauthorizes CHIP for just two more years, when many Senate Democrats want at least four years for CHIP).

Let me give you two reasons why the House leadership’s SGR repeal bill, summarized here, really is about fixing Medicare to make it work better for patients, not about fixing things to provide some unfair benefit to doctors:

1. It will improve access for patients enrolled in Medicare.  If the scheduled 21% SGR cut were to go into effect on April 1 as scheduled, there is no doubt that many (most?) physicians could no longer afford to see Medicare patients;  patients would begin to lose their doctors and would have great trouble finding new ones, as is the case today for many Medicaid enrollees.  Even if Congress decided to temporarily override the cut by freezing current rates for several more months, as it has done so many times before, physicians wouldn’t know what to expect when the patch again expires; such instability is causing many physicians to reassess how many Medicare patients they can see.  Plus, even with the temporary SGR overrides, Medicare payments have not kept pace with inflation for at least 13 years now—which in itself has caused some physicians to reassess their participation in the program.  For example, I know of a highly respected internist in Montana, a long time reader of this blog, who made the painful decision a few years ago to discontinue seeing any Medicare patients, because Medicare payments hadn’t covered his costs for years.  As long as we have the SGR formula, patches or no patches, the more we will see good physicians join this good Montana doctor in discontinuing or limiting participation in Medicare.

2. It will create incentives for physicians to provide higher quality, cost-effective and accessible care to patients.  It’s this aspect of the House’s SGR bill that has gotten the least attention from the news media and members of Congress themselves, when it is what the bill is mostly about, creating a better physician payment system.  In fact, the part of the SGR bill that repeals the SGR formula, and replaces the 21% cut from it with small positive updates over the next five years, is only 5 pages out of a 158 page bill!  What’s in the other 153 pages?

- Payment incentives for physicians who are able to demonstrate that they have made changes in their practices to benefit patients, like becoming Patient-Centered Medical Homes, a model that has been shown to improve quality and patient satisfaction and lower costs.

- Payment incentives for physicians who achieve better clinical outcomes, for using health information technology effectively,  and for delivering care more effectively and efficiently without sacrificing quality.

- Harmonizing and prioritizing measures to reduce the burden of reporting on physicians (accomplished by consolidating three existing Medicare reporting programs, each with their own measures, deadlines, penalties and incentives, into a single new Merit-based Incentive Program).

- A new option for physicians to earn even higher Medicare payments for participating in Alternative Payment Models (APM), like Accountable Care Organizations and advanced PCMHs, and for the medical profession to propose new models.

- More dedicated federal funding to develop good measures of quality, patient satisfaction and cost.

- And a new, federally funded program to help smaller practices.

These and other reforms made by the bill are all about changing Medicare payment policies to support greater value—quality, effectiveness, efficiency—to patients, the Medicare program, and to taxpayers who pay for it, and to support physicians who are willing to do their part to help achieve greater value for their patients. So yeah, you could say that the fix is in, but the fix is to make Medicare a better program for the patients enrolled in it, by changing the way that doctors are paid, not a “doc fix” implying an unfair sweet deal for doctors.

Today’s question:  “Doc Fix” or fixing Medicare to make it better for patients, what do you think the bill really does?

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About the Author

Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog

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