The ACP Advocate Blog

by Bob Doherty

Friday, February 21, 2014

We Don’t Need No Stinkin’ Patches

With apologies to the bandits in the classic, “Treasure of Sierra Madre”  movie starring Humphrey Bogart, it’s time to tell Congress that “we don’t need no stinkin’ patches” when it comes to the Medicare SGR formula.   (When asked by the gold-mining character played by Bogart to prove that they were the Policia, not the roadside robbers they really were, one of the bandits famously replied “We don’t need no stinkin’ badges” before relieving the miners of their gold).  Well, Congress’s approach to the SGR has been another form of highway robbery: February 20th marked the 11th anniversary of the first of 16 “patches” passed by Congress to avert the SGR cuts, at a whopping cost to taxpayers of $154 billion dollars!   ACP President Molly Cooke observed this “rotten anniversary” by issuing a statement calling on Congress to pass an historic bipartisan bill  to permanently repeal the SGR, before the current patch (that’s #16 if you are counting) expires at midnight, March 31.

What did the $154 billion that Congress spent on its 16 patches over 11 years buy us?  Repeal of the SGR?  Nope.  Stable payments?  Nope.  A better payment system?  Nope.  Instead, we got more than a decade of frozen payments, accompanied by all of the uncertainty of if and when Congress would enact another patch to stop the next round of scheduled cuts, only to see them pass a patch at the last minute (and sometimes retroactively past the last minute)—and then watch them do it all over again, and again, and again.  Year after year . . .a whole decade (plus one) of SGR patches.   The latest patch expires at midnight, March 31, and if Congress is true to form, it will pass patch #17, adding tens of billions more to the accumulated price tag of all the prior patches.

If wasting hundreds of billions  of taxpayers’ dollars on temporary patches that did not fix the real problem—the SGR itself--doesn’t count as highway robbery, I don’t know what does. 

This year could be different though.  The Congressional Budget Office has lowered the estimated cost of repealing the SGR to less than half of what it used to be.   For the first time ever, the congressional committees with jurisdiction over Medicare in both the House and Senate have reached a bipartisan agreement on an SGR repeal and replacement bill.   Organized medicine  is unified behind the bill they agreed on in a way it has never been before, with just about every specialty society, the AMA, and state societies working in concert to get Congress to pass it.   Just yesterday, 25 internal medicine-related organizations, including ACP, sent a letter to Congress calling for a vote on the SGR replacement bill.

There are obstacles, though: Congress needs to find about $128 billion in budget offsets (that is, goring someone else’s ox) to pay for it, a very high hurdle in an election year.  Or they could pass it without finding budget offsets, since the money that supposedly is “saved” because of the scheduled SGR cuts never actually produces savings, because Congress almost always passes a patch to override them.  Convincing fiscal conservatives to vote for a bill that technically is not paid for by cuts to someone else isn’t exactly a cakewalk, either. 
The only thing that will overcome these obstacles is if rank-and-file physicians tell their members of Congress that enough is enough, it is time to pass the SGR Repeal and Provider Payment Modernization Act of 2014, H.R. 4015/S. 2000, before SGR patch #16 expires on April 1. 

I have heard from some of you, though, who question whether this bill is really an improvement over the SGR and its patches.  It’s not a perfect bill—is there such a thing?—but by any reasonable standard it is far, far better than current law and the SGR.  Here’s why (and thanks to my colleague Shari Erickson in pulling all of this together so succinctly):

1. After 11 years, 16 patches, and $154 billion wasted.  It is time to pass SGR-repeal now! 

2. The bill establishes stable positive updates of 0.5% for the first 5 years (with rates then remaining stable from 2018-2023).  The alternative is a nearly 24 percent cut in 2014, followed at best by a freeze in payments, but more likely deeper cuts.

3. The existing Medicare quality reporting/incentive programs (PQRS, VBM, and MU) vary significantly in terms of measures, data submission options, and payment timelines—which results in significant confusion and hassles for physicians.  The new Merit-based Incentive Program (MIPS) would unify these programs.

4. This legislation keeps the money from physician quality incentive program penalties (in 2018 and beyond) in the physician payment pool; therefore, significantly increasing the total funds available to pay physicians.  This money would be lost if the current system remains in place.

5. 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.

6. 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.

7. Under current law, in 2018, physicians are faced with:
•    2 percent penalty for failure to report PQRS quality measures;
•    4 percent (increasing to 5 percent in 2019) penalty for failure to meet EHR MU requirements; and
•    Additional negative adjustments under the VBM program

All of which could add up to 6-8 percent cuts as early as 2018 and 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 (4 percent in 2018), which gradually increase over time. 
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 ($40 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—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.

12. Additionally, current law does not require payment for the management of individuals with chronic conditions.  CMS recently finalized via rulemaking that they will be paying for a similar code starting in 2015; however, the details of how that code will be implemented have not been finalized.  This bill would put the weight of law behind paying for a chronic care management code (or codes) and would ensure that PCMHs and PCMH-specialty practices could bill for them.

Twelve good reasons for physicians to support the SGR Repeal and Provider Payment Modernization Act of 2014.  Twelve good reasons for you tell Congress to stop passing temporary patches that waste money and only prop up a broken Medicare physician payment system.   

Twelve reasons to tell them that after 11 years, 16 patches, and $154 billion, we don’t need no stinkin’ patches.  Twelve reasons to tell them to pass The SGR Repeal and Provider Payment Modernization Act of 2014.  When they do, we will be able to celebrate the fact that that SGR patch #16 was the last of the 16 policy failures over eleven long years that got us into current mess. 

Today’s question: What will you do to get your members of Congress to pass the SGR Repeal and Provider Modernization Act of 2014?

3 Comments :

Blogger Robert J. Sobel, M.D. said...

Dear Bob,

I appreciate the insights and the rationales you provide. I could appreciate the benefit of consolidating quality initiatives, if I didn't believe that they are flawed at their core. The language necessary to convey these formulae is as Orwellian as it comes. It is hard to understand how ceding so much authority to HHS and its secretary is the best way to maintain a healthy medical profession that can focus on patients without more coercive constructs. I can only imagine the issues that will follow when every Medicare doctor has a single value score to determine his worth. I can't believe you don't see the slippery slope we have been and will continue sliding down.

There is a clause in the bill commissioning an independent group to study the cost and growth factors in parts A, B, and D. An insightful review would be welcome, and I predict would prove how misguided more quality bureaucracies would be.

The current state of affairs includes daily hassles for just about every branded drug I prescribe. Routinely, I receive notices, many erroneous, on how I could consider more generic drugs (statins, ACE inhibitors). The fall out of Hatch-Waxman involves price perversions that far outweigh the cost implications of all these percent penalties and bonuses that focus on physician manipulation.

The SGR should go, in that a tie of physician fees to global factors is absurd. Creating a unduly complex measuring system is not an improvement, however. This is especially true while multiple for-profit entities are involved in the process of patients and physicians carrying out the basic activities of modern medical care.

I am not denying the realities of competition and the necessity to foster innovation. I am arguing that hyper-innovation is a real threat. Over-priced drugs of marginal benefit and further money into administrative constructs is money wasted. Ridding us of the SGR is fine, but I am afraid we'll be further behind by the time the proposed solution has played itself out.

February 22, 2014 at 4:28 PM  
Blogger ryanjo said...

So you are saying we have a great opportunity here? Instead of stealing 24% of our earnings (after already taking the 2% sequester), we should be happy with "stable positive updates of 0.5% for the first 5 years (with rates then remaining stable from 2018-2023)" and "more reasonable limits in (penalties)... (4 percent in 2018), which gradually increase over time."

Well, hooray. So tell me again about how well ACP is doing "advocating for internists and their patients".

"The American Republic will endure, until politicians realize they can bribe the people with their own money." - Alexis de Tocqueville (1805–1859).

February 23, 2014 at 7:48 PM  
Blogger ryanjo said...

Readers of this post should read the ACP Internist Weekly (March 4, 2014), under the "Highlights" section: PCMH pilot demonstrated minimal quality improvement, no cost savings. Before ACP prematurely supports unraveling the payment system for medical care, and new payment models such as PCMH, it would be useful to actually have some supporting data. This study does not support such a radical change as being effective for either cost containment or quality improvement. But I guess that never stopped the politicians before.

March 4, 2014 at 7:17 AM  

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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

Email Bob Doherty: TheACPAdvocateblog@acponline.org.

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