Key Senate, House Committee Chairmen Offer Plan To Fix Medicare Doctor Payments
By Mary
Agnes Carey
KHN Staff Writer
Oct 31, 2013 - Kaiser Health News
The Democratic and Republican leaders of two key congressional committees
have agreed on a framework to scrap the problematic Medicare payment formula for
physicians and replace it with one that would link physician reimbursement to
the quality of care provided, a step that could put an end to the annual "doc
fix" debate.
The discussion draft released Thursday by the Senate Finance and
House Ways and Means committees would do away with the Sustainable
Growth Rate, or SGR. That formula, adopted as part of the deficit reduction
law in 1997, will reduce Medicare physician payments by nearly 25 percent next
Jan. 1 unless Congress intervenes. Stopping scheduled payment cuts caused
by the SGR has become a yearly ritual on Capitol Hill, leading to doctorsf
frustration with the system and a growing budget problem because each deferral
increases the size and price tag of the next fix.
"For years, Medicare payments to doctors have been at risk of getting
slashed, limiting seniors' access to high quality care," said Senate Finance
Committee Chairman Max Baucus, D-Mont. "Enough with the quick fixes. Our
proposal is for a new physician payment system that rewards value over
volume."
Providing a permanent solution – rather than the yearly "patches" that have
become so familiar – "is vital to ensuring that seniors continue to have access
to high quality care," said House Ways and Means Chairman Dave Camp, R-Mich.
Sen. Orrin Hatch of Utah, the top Republican on the Finance Committee, and
Rep. Sander Levin of Michigan, the top Democrat on Ways and Means, have also
endorsed the plan.
The proposal would make a historic shift in doctor payments, moving
physicians from the traditional system in which they are paid for volume and
instead use financial incentives to encourage them to move to alternative
payment models emphasizing quality care. The framework would repeal the SGR and
hold doctorsf pay at current levels as alternative payment models are developed
and tested. It would combine some existing Medicare physician quality programs
into a new initiative starting in 2017 that would offer doctors additional pay
based on their performance on value-based criteria, such as making more same-day
appointments for urgent needs and enhancing their use of electronic medical
records.
Providers who receive a significant portion of their annual revenue from an
alternative payment model would receive a 5 percent bonus through 2021. Those
models could include accountable
care organizations, in which doctors and hospitals work together to reduce
the cost of care for patients and share in those savings, or a patient-centered
medical home, where a primary care practice oversees all the medical needs of
its patients and monitors the use of specialists.
The proposal would also create a process to ensure accurate payment for
provider services, reward care coordination for patients with multiple chronic
conditions and introduce physician-developed care guidelines to reduce
"inappropriate care that harms patients," according to a summary.
In addition, physicians and patients would have access to more data on
quality and use of medical services in Medicare.
Linking physician payment to the quality of service provided – rather than
the quantity – is also a
goal of the Affordable Care Act. The Finance and Ways and Means plan hopes
to encourage physicians to move sooner to those new payment models, such as
ACOs.
Finance staff said Baucus wants to move the SGR legislation by the end of the
year and avoid another short-term patch, but that may prove ambitious due to the
dwindling number of legislative days left on the congressional calendar and the
potential difficulty of finding ways to finance the legislation.
Yet the fact that Democrats and Republicans have agreed in two chambers on
proposals to replace the SGR – in particular amid a bitter partisan battle over
the health care law and its
flawed rollout -- is significant and could speed its consideration on
Capitol Hill.
The Congressional Budget Office has reduced
its estimate of repealing the SGR to $139 billion over the next decade and
lawmakers in both parties are eager to take advantage of that opportunity.
Previous estimates to scrap the SGR were as high as $316 billion over 10 years.
Earlier this year the House Energy and Commerce Committee voted
unanimously to approve a SGR repeal that, among its provisions, would give
physicians a 0.5 percent payment increase
from 2014 through 2018. Starting in 2019, providers would receive that
0.5 percent update but could receive additional payments if they met specific
quality measures and clinical practice improvement activities.
The American Medical Association praised the draft from Finance and Ways and
Means.
"Building on the strong foundation laid this summer by the House Energy and
Commerce Committee, the framework c is an encouraging development and represents
a pivotal step toward stabilizing and improving the Medicare program on behalf
of Americafs seniors and physicians," said AMA President Ardis D. Hoven.
"Congress is demonstrating that they understand that ending the failed SGR
this year is fiscally responsible, and that the current Medicare payment system
is a barrier to adoption of health care delivery and payment reforms that will
improve health care for Americafs seniors and rein in overall costs," she
said.
The committees are taking comments on the proposal through Nov. 12.
© 2013 Henry J. Kaiser Family Foundation. All rights reserved.