SGR Repeal Bill Advances to Full House Committee

So-called "doc-fix" legislation that would replace the sustainable growth rate formula with a system that rewards physicians for delivering quality care could be up for a full committee vote this week.

A bipartisan proposal to repeal and replace the sustainable growth rate formula took a critical step forward on Tuesday. By voice vote, the Energy and Commerce subcommittee on Health passed a bill that replaces the existing Medicare's physician payment formula with a system to reward physicians for delivering quality care.

The action clears the way for a full committee vote, which could happen this week. Rep. Fred Upton (R-MI), who chairs the E&C Committee, has let it be known that he wants a full House vote on the SGR repeal and replace bill before Congress takes its annual August recess.

The lack of a funding scheme or offset could limit the bill's progress, however. The cost of repeal is currently tallied at $138 billion over 10 years.

Still, Rep. Joe Pitts (R-PA), the subcommittee chair, heaped praise upon the bill. "The time of temporary fixes and kicking the can down the road has ended," Pitts said in a statement. "The bipartisan committee draft we approved today permanently repeals the SGR and places us on a path to paying for innovation and quality, not volume of services, and puts doctors not bureaucrats, back in charge of medicine."

In addition to repealing the SGR, the key components of the bill include:

A five-year period of payment stability
The bill provides an annual statutory update of 0.5% per year for 2014 through 2018. During this time, payment incentives such as the Physician Quality Reporting Program (PQRS) and the Electronic Health Record (EHR) Incentive Program will continue.

Rewarding performance
Beginning in 2019, physicians receiving fee-for-service reimbursement will receive an additional update adjustment based on quality performance under the update incentive program (UIP). Performance will be assessed based on quality measures and clinical practice improvement.

Providers and other stakeholders will have a say in the development and selection of the UIP quality measures. High-performing providers will have the opportunity to earn a 1% bonus payment, while low performing providers will see a 1% reduction in payments.

Alternative payment models
Beginning in 2015, providers and other stakeholders may submit proposals for new payment models to an independent entity that will review proposals and make recommendations to the Department of Health and Human Services for models to move forward as either a demonstrations or permanent programs.

Care coordination and patient-centered medical homes
The bill establishes new payment codes for complex chronic care management. The legislation also ensures that Medicare payment is available for care coordination services performed by physicians who are certified as a level III medical home by the National Committee on Quality Assurance, recognized as a patient-centered specialty practice by the National Committee on Quality Assurance, and have received equivalent certification or meet other comparable qualifications.

Expanded Data for Care Improvement
To expand the availability of Medicare data for providers to use in developing new models of care and improving quality and patient care, the legislation expands access to Medicare data for certain certified entities.

The legislation eliminates the roadblocks that prevented these entities from sharing data directly with providers to facilitate the development of alternative payment models and care improvement.

Improved payment accuracy
The bill would ensure that providers could be compensated for the cost of submitting data. The legislation also directs Medicare to identify improperly valued services under the fee schedule that would result in a net reduction of 1% of the projected amount of expenditures for a year during 2016 through 2018.

Numerous physician groups, including the American College of Physicians, the American Academy of Family Physicians, and the Premier healthcare alliance, are voicing general support for the bill.

There are, however, calls for Congress to make changes in the bill to monitor patient access, to risk-adjust the quality measures for patient socio-economic status, and provide more funding for primary care physicians.