SGR Struggle Nears Tipping Point in Congress

Sooner rather than later, political and economic pressure appears destined to break the decade-long gridlock over fixing Medicare's broken formula for physician payment.

This could be the year.

With the beginning of spring training in Florida and Arizona, hope is swelling the hearts of baseball fans across the country.

And as the March 31 deadline approaches to avoid a Draconian 21% cut to physician payments under Medicare's widely despised Sustainable Growth Rate formula, a glimmer of hope is flickering in the hearts of healthcare industry stakeholders.

If willpower is an ingredient of success, then the tipping point is nearing in the ongoing struggle to repeal and replace SGR.

"As long as SGR is in place, we will continue to dig a hole," Barbara McAneny, MD, chairperson of the American Medical Association Board of Trustees, told me recently. "We are going to spend money on healthcare, and why do we keep pretending we're not?"

SGR: Medicare Reforms Proposed as Funding Offset

Over the past decade, Congress has spent billions to patch SGR, and the patch price piles up every year. The Congressional Budget Office now pegs the cost of resurrecting last winter's bipartisan $128 billion repeal-and-replace deal at $144 billion.

The New Mexico-based oncologist is hoping Congress will act decisively and judiciously to end the SGR saga once and for all. "If my major payer underpays me for medical services and threatens to cut my payment by 21% on April Fool's Day, how can I invest in my practice?" she says.

And she cautions against a radical shift at Medicare that could harm physicians in resource-poor areas of the country. "I don't think fee-for-service will ever go away. It will be a part of what we do in the future in some way."

Still, McAneny is hopeful: "I am optimistic they will get it done. There are people in Congress who want to do it."

A strong measure of political will to scrap SGR was displayed last month, during a two-day SGR hearing before the House Energy & Commerce Committee's health panel. Democratic and Republican members of the subcommittee were unanimous in their animus toward SGR, and broad support was voiced to build upon last winter's repeal-and-replace deal. The title for the hearing was hopeful: "A Permanent Solution to the SGR: The Time is Now."

Rather than rating the intensity of the rhetoric, the testimony of former US Sen. Joseph Lieberman (I-CT) was the most instructive in gauging the political appetite for slaying SGR.

Lieberman testified about one his hallmark issues: the national debt. His most astute political observations were interspersed between repeated calls for "Doc Fix" prescriptions with "pay-fors." He called last winter's repeal-and-replace deal an "extraordinary achievement," declaring during a question-and-answer portion of the hearing that "It would be a tragedy of will not to find the money to fund this bipartisan agreement you've made."

SGR: Work Resumes on Elusive 'Doc Fix'

Last winter's deal was one of the few instances of major legislation to gain bipartisan support in both houses of Congress in 2014. "What you've done is worth supporting," the former senator reassured the House members in the closing minutes of Day 1 of the subcommittee hearing. "It's a bipartisan, bicameral improvement, and Lord knows it might just start a cycle of virtue here [in Washington]."

Healthcare reform advocates are clamoring for federal officials to step up to the plate and take a homerun swing at value-based payment models as an essential element to crafting a long-term SGR fix.

Harold Miller, CEO and president of the Pittsburgh-based Center for Healthcare Quality and Payment Reform, was a keen observer of last month's SGR hearing in the House. He is advocating a long-term SGR fix that would be financed largely with cost-efficiency gains generated from implementation of value-based payment models such as bundled payments.

After the House hearing, Miller said McAneny had shown lawmakers the light with her testimony, if they wanted to see it.

McAneny told the subcommittee that many providers are ready to forge ahead with value-based payment reforms including her colleagues in New Mexico, where she has pioneered demonstration projects with federal grant funding to boost patient engagement and care coordination.

Her written testimony includes an impassioned plea: "[Demonstration] projects have dramatically reduced the rate at which their patients have had to go to an emergency room or be hospitalized for complications, saving Medicare far more than the cost of the services supported by the grants. But in most cases, the improvements in care and the savings achieved in the demonstration projects end when the demonstration ends, because there is no way to sustain the projects under the current payment system."

Miller says McAneny and innovative healthcare providers like her are offering lawmakers a golden opportunity to fix SGR and move Medicare away from its expensive fee-for-service payment model. "She's already doing it, but she can't sustain it."

Paying for a Doc Fix
Patrick Dunham, chief executive at Smyrna, GA-based Curant Health and co-author of a 2014 study about the positive impact of medication therapy management on hospital readmissions, believes value-based payment reforms matched with value-based redesigns of healthcare services could finance an SGR fix.

"The value placed on preventative care needs to increase. By value, we mean outcomes divided by costs. Metrics and payment models for improving outcomes (increasing the numerator in that equation) should include greater reimbursement for services like medication management that drive higher levels of adherence," Dunham told me recently.

"Simultaneously, rewarding providers that demonstrate measurable cost reductions, especially before patients 'go acute,' and driven by an improvement in outcomes should be included in any new legislation that intends to shift from fee-for-service to value-based care. Our demonstrated ability to reduce readmissions in the Medicare population is a perfect example."

As they ponder the fate of SGR over the next month, Dunham urged lawmakers to embrace a mindset that is not fixated on cost.

"Our healthcare system exists in an environment with a 50-year-old model and stakeholders who don't want to see change. While too many of the stakeholders are continuing to fight over the bottom line of their balance sheets and the bottom line of the value equation (cost), we will continue working with our colleagues like Sharon Dudley-Brown at Johns Hopkins and to prove that collaborative care, inclusive of enhanced medication therapy management, has a major positive effect on the top line of the value equation, outcomes, to the benefit of all stakeholders."