Getting rid of Medicare’s SGR formula has been organized medicine’s Holy Grail. But medicine has gotten no closer to finding a solution to the SGR than the medieval knights did in their search. This year could be different, though. The House and Senate both are working on bipartisan plans to repeal the SGR and reform Medicare payments, plans that are being developed with the input of physicians.
Yes, you heard that right, bipartisan plans. At a time where Republicans and Democrats can’t seem to agree on which way is North and which way is South, they have put aside their differences (at least for now) in their search for a solution to the SGR conundrum.
And yes, you heard that right, they are listening to physicians. On May 7, Dr. Chuck Cutler, the Chair of ACP’s Board of Regents, appeared as a witness at an SGR hearing convened by the Ways and Means Health Subcommittee. Unlike the usual process for hearings, where the party in charge (in this case, the Republicans) picks witnesses that they know will support their views, and the minority party (in this case, the Democrats) gets to invite just one “minority” witness to represent an opinion that is usually at odds with the majority party’s views, Dr. Cutler (and the other invited witnesses) were selected on a bipartisan basis. Dr. Cutler’s testimony proposed a pathway to repeal the SGR, provide positive and stable payments, and a transition period to better payment models aligned with value to the patient.
Then, on May 28, the House Energy and Commerce Committee, which shares responsibility for Medicare payment policies with the Ways and Means Committee, released a draft bill to repeal the SGR, provide a period of stable payments, and create an annual fee-for-service (FFS) incentive update program for physicians who report on measures relating to core clinical competencies, with an opt-out from the competency incentive program for physicians who participate in alternative payment models, such as Patient-Centered Medical Homes and Accountable Care Organizations. The draft bill, by the committee staff’s own admission, lacks many details, such as the dollar amounts and percentage increases in the annual updates and competency update incentive program, how long the period of “stable” payments would last, and whether there would be penalties (lower FFS payments) instead of just positive incentives if physicians did not successfully participate in the competency update program. ACP, like other medical organizations, was asked to provide the committee with recommendations on the draft bill by June 10.
Meanwhile, over at the Senate side, Senate Finance Committee chairman Max Baucus (D-MT), and ranking Republican Orrin Hatch (R-UT) invited ACP, the AMA, the American College of Surgeons and other specialty societies to provide them with input on several key questions they plan to address in an SGR bill, including how to improve the accuracy of the relative values used by Medicare to determine FFS payments, address over utilization that may be encouraged by the FFS system, and help physicians transition to new value-based payment models. ACP’s response proposed 19 specific ways to improve the Medicare physician payment system and reduce excess and inappropriate utilization. To improve the Medicare physician fee schedule, we recommended that Congress direct CMS to gather independent data—in addition to the Relative Value Update (RUC) process—to improve RVU accuracy; that it authorize CMS to pay physicians for the work that falls outside of a visit involved in care coordination; and that it require Medicare to redirect payments for overvalued procedures to undervalued evaluation and management services, among other steps.
To address overutilization, ACP’s recommendations to the Finance Committee included: creating an add-on to evaluation and management codes when physicians document that they have incorporated high value care clinical guidelines (such as guidelines from ACP’s High Value Care Initiative and the ABIM Foundation’s Choosing Wisely campaign) into their practices and engaged their patients in shared decision-making based on such guidelines; developing alternatives to pre-authorization that would focus on encouraging use of appropriateness criteria by “outlier” practices rather than requiring all physicians to jump through hoops to get a test ordered; and providing physicians with transparent information on the quality and cost of care of their physician colleagues and hospitals in their community to allow them to make more informed referrals. And, ACP proposed a step-by-step approach to stabilize Medicare payments and create positive incentives for physicians who participate in programs to improve clinical outcomes, efficiency and effectiveness.
When you think about it, the Holy Grail is to improve the Medicare physician payment system so it helps physicians deliver high quality and cost-effective care, not just to get rid of the SGR. The result will be big changes not only in the way Medicare pays for services, but in how physicians organize and deliver care. Getting there will not be easy, and we may again get lost along the way, but for once Congress and the medical profession together appear to be heading in the right direction.
Today’s questions: Are you encouraged by the movement on Capitol Hill on bipartisan plans to repeal the SGR and reform payments? What changes would you make in the Medicare payment system to help physicians deliver high quality and cost-effective care?