Lawmakers Revise SGR Repeal Proposal, Scale Back Penalties; Another Short Term “Doc Fix” Likely Until Early 2014

The Senate Finance and House Ways and Means Committees have released an update to last month’s Discussion Draft to repeal Medicare’s sustainable growth rate (SGR) payment formula. The changes followed feedback from physician groups and include physician-favorable modifications to the October version.

The revised draft includes scaling back the Value-Based Performance (VBP), the amount of payment that is contingent on performance. This phase-in approach, according to the drafters, “allows professionals time to adjust to the single consolidated incentive program.” The maximum upside adjustment also decreased to the revised proposal numbers. 

The updated draft bill also calls for subjecting non-physicians, such as nurse practitioners and physicians assistants, to the VBP program in 2017, instead of beginning in 2018.

The updated draft gives professionals credit for year-to-year improvement in the determination of their “quality and resource use performance category score.” The Committee staff hoped this responded “to the concern that assessing performance only on achievement pits professionals against each other.”

The new model also drops the 10% penalty for doctors who do not report cost data. The updates still seek to ensure accurate valuation of the physician fee schedule by retaining incentive payments for proper data collection.

The modifications invest more money in encouraging Alternative Payment Model (APM) participation. The first draft included $50 million over five years, and now the funding is set at $25 million, each year, over five years. Furthermore, it changes the six-year period that APM participation bonuses are available from 2016-2021 to 2017-2022. Importantly, the revisions encourage APM by creating a new “partial qualifying APM participant” category for professionals who come within a narrow margin of qualifying APM participation. These partial qualifying APM participants will have the option of: (1) reporting VBP quality measures and receiving the corresponding incentive payment; or (2) not participating in the VBP program and receiving no payment adjustment.

The partial qualifying APM participant revenue thresholds are:

• 2017-2018: 20% of Medicare revenue
• 2019-2020: 40% of Medicare revenue or 40% of all-payer revenue and 20% of Medicare revenue
• 2021 and subsequent years: 50% of Medicare revenue or 50% of all-payer revenue and 20% of Medicare revenue

The draft encourages small practices (with 10 or fewer eligible professionals) to succeed in the VBP or move to an APM by offering increase technical assistance.

The updated draft lowers from 1 percent to 0.5 percent the amount of savings that CMS must get from revaluing billing codes. Also, if CMS saves more than half a percent in any of the three years of the program, that extra amount counts toward savings goals in following years.

120513_Modifications to the Bipartisan Bicameral Discussion Draft

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Next week, Congress expects to vote on a bipartisan proposal that would permanently repeal the SGR; however, Politico notes that the two committee votes are scheduled just days before Congress adjourns for the year. Thus, even if they pass, the bill will not have enough time to make it through the entire legislative process. In the meantime, lawmakers are considering legislation that would delay by one to three months a 24% cut to physician reimbursements that is scheduled to take effect on Jan. 1.