Hearing Synopsis Courtesy of Marilyn Singleton, MD, JD
The Energy and Commerce subcommittee on Health held hearings on January 21 and 22, 2015 to discuss the elimination of the SGR (Sustainable Growth Rate). The hearing is entitled “A Permanent Solution to the SGR: The Time Is Now.”
Witnesses included former Senator Joe Lieberman, the president of the American Hospital Association, the AARP president, representatives from the AMA Board of Trustees, the AOA Board of Trustees, and the president of the American Association of Nurse Practitioners.
Last year a bipartisan bill to repeal the SGR, H.R. 4015, SGR Repeal and Medicare Provider Payment Modernization Act, was introduced by Michael C. Burgess, M.D. (R-TX). The House on March 14, 2014, approved H.R. 4015 by a vote of 238 to 181.
In the Senate, a similar SGR repeal bill, S. 2000, Medicare Provider Payment
Modernization Act of 2014, was introduced.
As summarized by the Congressional Budget Office, major provisions of H.R. 4015 are:
(1) The bill repeals the SGR and ensures a 5-year period of annual updates of 0.5 percent to transition to the new system.
(2) Fee for service would remain until 2024 but be subject to up or down adjustments depending on whether the physician chose to participate in a Merit-Based Incentive Payment System (MIPS) or an Alternative Payment Model (APM) program. This consolidates various quality and performance-based payment programs that “reward value over volume.”
(3) For 2024 and subsequent years, there would be two payment rates for services on the physician fee schedule. For providers paid through the MIPS program, payment rates would be increased each year by 0.5 percent. For providers paid through an APM, payment rates would be increased each year by 1 percent.
(4) Payments to providers who participate in the MIPS program would be subject to positive or negative performance adjustments. The performance adjustment for an individual provider would depend on that provider’s performance compared to a performance threshold.
(5) Current-law penalties for providers who do not achieve meaningful use of electronic health records (EHR) or report quality data are eliminated. However, physicians would have to meet standards for use of EHR and quality as part of the MIPS program.
A focus of the hearing was how to offset the $140 billion cost of the new payment system. Proposals address the current Medicare structure which because of the low cost-sharing and benefit structure “encourages over-utilization.” In place of the current structure, a single combined annual deductible and a uniform coinsurance on health spending above the deductible. Another proposal advanced by former Senators Bill Frist, M.D. and Tim Daschle calls for more competitive networks in Medicare and providing more catastrophic protections. Their proposal also reduces Federal subsidies for higher-income individuals, i.e., charging “wealthier” seniors more for physician services and drug coverage.
Hearing Memo: http://docs.house.gov/meetings/IF/IF14/20150121/102825/HHRG-114-IF14-20150121-SD003.pdf
SGR fact sheet: http://energycommerce.house.gov/fact-sheet/repealing-and-replacing-sustainable-growth-rate#sthash.5Tl33wLW.dpuf
Hearing Website: http://energycommerce.house.gov/hearing/permanent-solution-sgr-time-now
