On October 30, the Senate Finance Committee and House Ways and Means Committee released a summary of their joint, bipartisan, framework for repealing the sustainable growth rate (SGR) formula and replacing it with a new Medicare physician payment system.
Importantly, the summary is labeled as a discussion draft, and legislative language has not been released. As a result, important details are not yet known. The committees indicate that they will welcome feedback that is provided by November 12.
Following are some of the key provisions outlined in the draft:
– The SGR formula is repealed.
– Annual fee schedule payment updates would be frozen for 10 years; annual positive updates would begin in 2024.
– A new “value-based performance (VBP) payment program” would be used to adjust payments beginning in 2017. This new VBP program essentially combines all the current incentive and penalty programs (e.g., value-based modifier, meaningful use, PQRS) into one budget-neutral program. Payments could be increased or decreased significantly, depending on how well a physician scores relative to others on a composite performance score.
– Physicians participating in certain alternative payment models, including the patient-centered medical home, would be exempt from the VBP program. Revenue thresholds are established for APMs other than the medical home model, and two-sided risk and a quality component would be required to qualify for a 5% bonus in 2016-2021.
– Several proposals to “ensure accurate valuation of services” under the physician fee schedule are made. Over a three-year period, misvalued codes would have to be adjusted to achieve 1% in total fee schedule savings to avoid reductions in the total physician payment pool. In addition, the Secretary of HHS would initiate a data collection effort on resource use requiring selected physicians to submit data (CMS may provide some compensation to physician for doing this) or face a one-year, 10% payment reduction.
Appropriate use criteria would be applied to certain imaging services; prior authorization requirements would be imposed on outliers.
HHS would publish utilization and payment data for physicians on the Physician Compare web site.
Some of issues that are raised in the draft were anticipated, others were not. The AMA is in the process of reviewing the proposal in greater detail and identifying areas that need further clarification, in preparation for offering constructive recommendations for improving the framework so that it is better aligned with our policy.
In the meantime, our messaging has focused on maintaining the momentum for repealing the SGR, rather than on the details of the product itself.
