Last night, the House Energy and Commerce Committee released a bipartisan bill to repeal Medicare’s SGR formula, replacing it with a system that will involve quality reporting under the fee-for-service (FFS) system combined with strong incentives for physicians to move into alternative payment models. While the bill offers a lifeline to physicians who choose to remain in FFS, the incentives favor physicians who are willing to take the necessary steps to become Patient-Centered Medical Homes, Accountable Care Organizations, or other models that enhance care coordination, patient safety, prevention, and patient experience with the care provided. The bill promotes many of the goals that ACP has advocated to Congress through its comments on prior drafts of the legislation, including repeal of the SGR, providing five years of stable and positive payments to all physicians, creating opportunities for physicians to get incentive-based quality payment updates, and establishing a transition period and pathway for physicians to participate in alternative payment models.
Repeals the SGR, immediately upon enactment.
Provides for positive but modest, annual Medicare fee schedule updates in 2014 through 2018 of O.5%.
Establishes a Quality update incentive program beginning in 2019 for physicians who choose to continue to be paid under FFS. Physicians would self-select a “clinical cohort” applicable to their specialty and type of practice, and would be measured based on how well they performed on clinical performance measures and clinical practice and care delivery systems appropriate for their cohort. Emphasis would be on measures that improve care coordination, patient safety, prevention, and patient experience with the care provided. Physicians would be scored on a scale of 1 to 100, and those scoring in the top third would get an annual FFS update of 1.5%, those scoring in the next third would get a 0.5% update, and those in the lowest third would get a MINUS 0.5%. Those who declined to participate in the quality reporting program, or to join in an approved new Alternative Payment Models, would get a 5.0% cut in their total Medicare payments each year starting in 2019.
Creates a process for physicians to recommend and participate in Alternative Payment Models to Medicare. Alternative Payment Models selected by CMS would not participate in the quality update incentive program; instead, physicians in those models would be paid under the payment rules applicable to the particular model. For instance, an approved ACO might be paid under a shared savings arrangement; a PCMH under a risk-adjusted capitation system combined with FFS and shared savings.
Medicare would be directed to begin paying physicians, starting in 2015, for care coordination of patients with complex chronic diseases. However, in order to qualify for such payments, physicians would have to be in a Patient-Centered Medical Home, or a Patient-Centered Medical Home specialty practice, as recognized by the National Committee on Quality Assurance (NCQA) or another certification process as established by the Secretary.
The bottom-line for physicians is that the bill gets rid of the annual specter of double-digit SGR cuts, stabilizes FFS payments, offers FFS physicians the opportunity to improve their FFS updates for successfully reporting on quality measures, promotes the importance of care coordination and especially, the Patient-Centered Medical Home model, and creates incentives and opportunities for physicians to recommend and participate in medical homes and other Alternative Payment Models that would be paid under their own rules instead of the FFS quality update program.
The bipartisan message from Congress is clear: if physicians choose to remain only in FFS, their annual updates going forward will be very modest, 0.5% for the next five years, and no more than 1.5% and as low as -0.5% depending on where they rank in the new quality reporting system that would begin in 2019. (And if they don’t participate in the quality reporting system at all, or one of the Alternative Payment Models, they would get an annual 5% cut). But physicians who are willing to become certified PCMHs, or become specialty practice medical home neighbors, or enter into ACOs or other alternative models, won’t have to report on the measures for the quality update program or be subject to annual FFS quality update incentives. Instead, they will have more opportunities to be reimbursed for complex chronic care coordination and share in savings to the Medicare program from improving care coordination, patient safety, and patient experience with the care provided.
Because the bill has support from both Republicans and Democrats, it has a reasonably good chance of making it through the House of Representatives. The Senate is working on a similar approach. So if you are a physician who has been on the fence on whether it is worth it to become a PCMH or an ACO, well, the incentives are now clearly pointing you in that direction.
Today’s question: What is your reaction to the bipartisan SGR repeal, physician payment reform bill?