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Capitol Hill Report: Victory! Congress Permanently Repeals SGR

April 14, 2015

By Mike Amery, Senior Legislative Counsel, Federal Affairs

Victory! Congress Permanently Repeals SGR
The US Senate took the final step in permanently repealing the flawed Sustainable Growth Rate formula on a 92-8 vote Tuesday.

Republicans and Democrats each offered three amendments, but all failed as the Senate passed language identical to the bill passed as H.R. 2 by the US House last month. It ended a series of 17 temporary patches since 2002.

The Medicare Access and CHIP Reauthorization Act of 2015 begins to fundamentally change the way Medicare will operate in the future. It is important to understand that the bill is a starting point for changing the system in a way that improves physician participation in Medicare to ensure patient access to care.

The AAN, along with the entire physician community, supported this legislation because it’s an improvement compared to the status quo. The bill is not perfect, but it does contain modest payment updates that are a stark contrast to a 21-percent cut or the prospect of Congress repeatedly using the physician community as the offset for future patches, like what occurred in 2014. The bill consolidates several burdensome programs (PQRS, MU, and VBPM) into one streamlined program that will set more realistic benchmarks for neurology practices and funds bonuses for those who perform well. The bill also preserves the fee-for-service option, which has been the desire of many solo and small group neurology practices around the country.

The AAN worked with members of Congress and their staff throughout the process of developing this bill. We now look forward to fully participating in the implementation of H.R. 2 to protect the interests of America’s neurologists and the patients they serve. Just remember, this is not the end, but rather the beginning. Many of the details remain to be written, but a starting outline follows:

The Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2)

H.R. 2 is the result of a multi-year, bipartisan, bicameral process representing the most significant change to US health care policy since the Affordable Care Act. It repeals the SGR formula and enacts widespread changes to the way Medicare pays physicians by transitioning from a volume-based to a value-based system over the next decade. Below are highlights on H.R. 2:

SGR repeal: Effective immediately, the sustainable growth rate (SGR) formula has been permanently repealed. This ends the current and all future payment cuts called for by this faulty formula.

Fee updates: This legislation provides 4.5 years of 0.5 percent annual updates, through 2019. Then, from 2020 through 2025, updates are frozen at 2019 rates. For 2026 and beyond, two conversion factors will take effect:

  • 0.75 percent for participants in qualifying alternative payment models
  • 0.25 percent for everyone else

Merit-based Incentive Payment System (MIPS): Starting in 2019, Medicare’s key quality initiatives—PQRS, Meaningful Use, and the Value-based Payment Modifier—would be consolidated into a new program, MIPS. Conversion to a single program means physicians will have more options to meet requirements and a streamlined way to track performance for all Medicare quality initiatives.

  • Payment adjustments: Under MIPS, physicians will have the opportunity to earn bonuses in excess of those available under current law and would face lower penalties.
  • Improved ways to demonstrate quality: Physicians will have more flexibility to select criteria they wish to report on and receive credit for improving as well as hitting performance targets.
  • Technical assistance for small and rural practices: From 2016 to 2020, $100 million will be available to help practices of up to 15 professionals and rural practices to participate in MIPS or transition to an alternative payment model.

Alternative payment models (APMs): Participants in a qualifying APM are exempt from MIPS and are eligible for a 5-percent annual bonus from 2019 to 2024. The bill provides support for the development of new APMs, including those for specialty physicians.

Chronic care management: Through at least one payment code, Medicare will be required to pay for care management of patients with chronic conditions. Payment of this code will not require an annual wellness visit or an initial preventive physician exam.

Electronic health records (EHR): The bill sets a goal of interoperability of EHR systems by December 31, 2018. Should this not happen, the Health and Human Services Secretary is given discretion to adjust the penalties for Meaningful Use and/or decertify EHRs.

Quality measure development: From 2015 to 2019, $15 million per year will be available to stakeholders such as the AAN to support quality measure development.

Children’s Health Insurance Program (CHIP): Funding is extended through fiscal year 2017.

Global periods for surgical services: This bill reverses the decision by the Centers for Medicare & Medicaid Services to phase out the 10- and 90-day global periods. Instead, the HHS must collect data to ensure the accuracy of these bundled payments.

Additional Summaries

The full impact of H.R. 2 will take time to understand and finalize in the coming years through the rulemaking process. Know that your AAN is committed to keeping you informed and to aggressively advocate for the specific needs of neurology as provisions are defined and implemented.

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