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SGR Replacement Poses Daunting Challenges

 |  By Christopher Cheney  
   January 04, 2016

A new Medicare payment system for physicians and other frontline providers is slated to launch in January 2019. Given the difficulties involved in crafting the new rules, federal officials have a busy three years ahead of them.

This is not going to be easy.

Last year's passage of the Medicare Access and Children's Health Insurance Program Reauthorization Act (MACRA) has set in motion a lengthy and likely arduous effort to replace Medicare's reviled Sustainable Growth Rate (SGR) formula for physician reimbursement.



Barbara L. McAneny, MD

MACRA has two essential elements: the Merit-Based Incentive Payment System (MIPS), which ties annual Medicare Physician Fee Schedule payments to value, and an incentive program to encourage physicians and other frontline healthcare workers to participate in Alternative Payment Models (APMs) that reimburse Medicare providers based on value of services rather than service volume.

The most daunting challenge facing the federal officials who are crafting the reimbursement rules for MACRA is accounting for the healthcare industry's variety of providers and the country's diverse economy, says Barbara McAneny, MD, FACP, CEO of the New Mexico Cancer Center in Albuquerque and member of the American Medical Association Board of Trustees.

"We need to figure out how we're going to take care of everybody, including the small-town doctor and the pathologist at a small community hospital. Pathologists become a commodity in the accountable-care-organization world, getting paid less and less, and then they give up," McAneny says.

While noting that almost any payment system would be better than the annual high-stakes battle in Congress over adjusting and reauthorizing SGR, the practicing oncologist says she fears officials at the Centers for Medicare & Medicaid Services (CMS) is creating a new Medicare reimbursement monstrosity. "What they should do is offer a menu of payment model options. We are facing a significant physician shortage in this country. … Therefore, we need to make sure we keep every physician as functional and financially sustainable as possible."

SGR Replacement Process Churning

CMS has taken several steps to lay the foundation for the MACRA ruling-making process.

On July 16, the Medicare Learning Network made a presentation to healthcare providers that gave a "general summary" about the MIPS and APM provisions of MACRA. In October, CMS released a Request for Information from the public about MACRA rule-making that generated more than 460 comments. Last month, CMS released a proposed Measure Development Plan (MDP) that seeks to revise and consolidate Medicare quality measures linked to physician reimbursement. The MDP, which is open to public comment through March 1, is designed to "leverage quality measure development as a key driver to further the aims of the CMS Quality Strategy: better care, smarter spending and healthier people," the document states.

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.

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