Senate committees advance SGR repeal proposals

Carrie Lamb
12/16/2013 at 3:00PM

The Senate Finance and House Ways and Means committees on Dec. 12 each passed proposals to repeal the flawed sustainable growth rate (SGR) and change the way physicians are paid under Medicare. This action comes after the House Energy and Commerce Committee passed its SGR repeal-and-replace legislation earlier this summer. While the Senate proposals sought to build on that legislation, both are markedly different. ASPS is supportive of much of the Energy and Commerce plan but opposed to the newly passed proposals.

One of the Senate Finance proposal's greatest departures from the Energy and Commerce plan is that it would freeze physician payment at its current level for 10 years. The Ways and Means Committee's original proposal also included a 10-year freeze in payments, but in response to the comments of many in the physician community, a 0.5 percent update for each of the first three years was added. Unfortunately, a seven-year pay freeze would follow these three years of positive updates. The Energy and Commerce legislation provided for five years of 0.5 percent positive updates.

Much like the Energy and Commerce proposal, the Senate proposals include a new payment structure that bases payment on new quality components and create a value-based performance (VBP) payment program that would combine reporting for the Physician Quality Reporting System (PQRS), the Value-Based Modifier and the Electronic Health Records (EHR) Meaningful Use program. The penalties that would have been assessed under these three programs will be combined and remain in the physician payment pool. The VBP creates "assessment categories" for reporting, which include quality measures, resource use, clinical practice improvement activities and EHR Meaningful Use. Physicians would be assessed a composite score based on the VBP categories and receive payment adjustments based on that composite score.

The VBP program is designed to be budget neutral, meaning positive payment updates for high-scoring physicians would be offset with negative updates for lower scoring physicians. ASPS opposes the budget neutrality of this proposal as it pits physicians against each other, making them competitors instead of partners in advancing quality care.

Both new proposals include a provision stating that physicians who do not meet the low-volume threshold for treatment of Medicare beneficiaries may be exempt from the VBP program. The proposals give the Secretary of Health and Human Services the authority to define the low-volume threshold by choosing between a minimum number of Medicare beneficiaries seen by a physician, a minimum number of items and services furnished to beneficiaries by the physician, or a minimum amount of allowed charges billed by the physician.

A major goal of both proposals is to encourage physician participation in alternative payment models (APM). The potential 5 percent payment update for participation in two-sided risk APMs and the score for clinical improvement activities, which includes participation in a Medicare APM, are attempts to move away from the fee-for-service system. Participants in APMs are also excluded from the VBP.

While ASPS continues to be supportive of a permanent repeal of the SGR, the Society has opposed the Senate Finance and House Ways and Means proposals due to their budget neutrality, lack of positive updates, inadequate period of transition to new payment models, among other reasons. ASPS will continue to work with Members of Congress to amend the current proposals and to provide stability to all physicians by permanently repealing the SGR. 

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