Negotiations are apparently underway in the House of Representatives over the Medicare Sustainable Growth Rate (SGR) formula, and agreement on a possible repeal could be on the horizon.
The new efforts will hopefully lead to an improved, permanent payment system that ensures Medicare is on a sustainable path going forward, said Sen. Ron Wyden (D-Ore.), ranking member of the Senate Finance Committee.
Sen. Ron Wyden (D-Ore.)
“I’ve been in Congress long enough to be skeptical of rumors, but what we are hearing from the House suggests there is real movement to fully repeal and replace the flawed formula for paying Medicare providers known as SGR,” Sen. Wyden said in a statement. “If what we’re hearing is true, it’s good news and moves us closer to something I’ve been working tirelessly to achieve – a payment formula that stands on its own, doesn’t require annual and expensive ‘patches,’ and which opens the door to improving the way care is delivered.”
The current SGR patch expires March 31, after which physicians can expect a 21% pay cut.
A new analysis of last year’s repeal legislation notes the bill has strengths and weaknesses for physicians (Health Aff. 2015 doi: 10.1377/hlthaff.2014.1429). Current congressional deliberations are focused on how to pay for the SGR fix, with wide consensus that the 2014 legislation will remain the basic model for reform.
The SGR Repeal and Medicare Provider Payment Modernization Act of 2014 includes opportunities for specialists to participate in pay-for-performance programs and other alternative payment models, according to author James Reschovsky, a senior fellow at policy research firm Mathematica Policy Research. The legislation would create two new payment pathways for doctors, one for those who want to continue to receive fee-for-service payments, and another for those already participating in value-based payment models, including accountable care arrangements and bundled payment initiatives.
But the bill fails to address distortions in Medicare’s fee-for-service fee schedule, which some argue overvalues specialty care services, while undervaluing preventive care, Mr. Reschovsky and his colleagues said. Without fixing that defect, specialists may find it more lucrative to stay in Medicare’s fee-for-service program and continue to concentrate on providing high-cost services. Attempts to bring down costs through ACOs and other alternative payment methods also will be difficult as long as the fee-for-service pay rates underlying these programs are skewed.
“Correcting fee schedule valuations will be a substantial and controversial undertaking,” they wrote. “But it is one that is vitally important to the SGR fix’s prospects for success.”
The SGR Repeal and Medicare Provider Payment Modernization Act of 2014 passed the House last year, but was not taken up by the Senate
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