SGR Repeal & Replacement Act

AR-307319997If there was any truth, whether by design or default, to Nancy Pelosi’s infamous quote regarding the Affordable Care Act – i.e., that Congress would have to pass it to find out what’s in it – then she could have been alluding to the reality that the ACA is much more of a framework for creating future policy through regulation than it is prescriptive on the means of enactment.  And for that – and for many of those who did read the ACA – it has taken a fair share of plausible criticism.

Now comes the SGR Repeal and Medicare Beneficiary Access Improvement Act of 2013 (introduced on December 10th of last year).  As of my writing this blog post it has overall received pretty broad support, including from two of the largest and most respected physician trade associations (e.g., the AMA and AMGA) that if you weren’t familiar with the politics behind it would be truly dumbfounding.

Without expressing an opinion on the merits of the legislation, I believe that if you have found core concepts of the ACA unacceptable, then you sure as hell can’t be comfortable with many of the concepts contained in the SGR Replacement bill. I can only guess that most folks know about as much about the latter as they do about the former – and that they take their lead from media interpretations. Or the country is so desperate to have a Congress that works constructively on anything instead of being at war, they read "bipartisan" and jump off the cliff.

My areas of experience and expertise have never included consulting to physician practices, so if I am out of my league here, I apologize in advance. But from what I do understand provided below is a summary of the bill’s key components.  You can decide whether you favor these ideas based upon what’s already been debated regarding the ACA.

Repeal of the Sustainable Growth Rate
This one’s rather easy and hard to imagine will face much controversy. Everyone I have ever met in healthcare wanted to see the SGR formula repealed in favor of a stable, sustainable approach that wouldn’t push uncertainty of physician income to the cliff on a continual basis. Economic uncertainty due to congressional inaction has been the single greatest shortcoming of Congress over the past decade.
Purpose: Create a permanent fix to the Medicare physician payment approach
Risk: It actually fails to control costs and gets debated all over again in five years

Fee Updates
From 2014 through 2018, annual updates will be 0.5%. From 2019 on the 0.5% update would continue – but there would be incentives and potential penalties under a new Quality Incentive Program.
Purpose: Recognize the need to reflect impact of very modest cost inflation
Risk: Medical inflation substantially outpaces 0.5% a year, and the alternative payment models described below fail to provide adequate compensation

Reporting System to Improve Accuracy of Relative Values
Based upon existing data, patient scheduling systems, cost accounting systems, etc., payment incentives would be provided for reporting groups (i.e., physicians across specialties and setting). While this doesn’t appear to be a mandatory requirement, to the extent compensation is available to subsidize cost reductions it will become a de facto requirement.
Purpose: Creation of a data set that can be used to incentivize and reward productivity based upon comparing relative costs and outcomes
Risk: The cost of collecting and analyzing the data far outweigh any long-term cost benefits achieved

Adjustments for Misvalued Physicians’ Services
What will the reporting system above be used for? To identify services whose relative value adjustment would result in a reduction in spending up to 1%. And, of course, this would not be a budget neutral proposition: funds would be removed from the pool of spending for Medicare physician services.
Purpose: To achieve meaningful cost savings where value being produced isn’t commensurate with cost of production
Risks: Historical measures may not be reliable indicators of true cost and methodologies for determining value could be harmfully arbitrary and/or subjective

Quality Update Incentive Program
A new QUIP reporting system would begin triggering payment incentives and penalties beginning in 2019, unless a physician or other eligible professional is already in an alternative payment model. The QUIP quality measures would replace those of the existing PQRS reporting and penalty program, though that program would remain in force. The QUIP would be used to adjust payment rates +/- 1% (or zero) based on scores relative to peer groups, and as an incentive to report there will be a 5% reduction in cost reimbursement for failure to participate.
Purpose: Provide financial incentives to improve quality while reducing costs
Risks: See above

Advancing Alternative Payments Models (APMs)
$2 billion is being advanced from the Medicare Trust Fund for the evaluation, approval and implementation of APMs. A unique bent is the Secretary of HHS must contract with an independent entity to do this rather than CMS (i.e., a privatization of the process – though certainly not beyond the realm of politicization). But the underlying idea is consistent with the ACA’s effort to incentivize innovative new payment models that lower cost and improve quality outcomes, while underwriting the means of education and ability to replicate successful models.
Purpose: To use alternative payment methodologies to incentivize greater provider collaboration and coordination
Risk: Payment incentives become misaligned with provider incentives resulting in practice choices that are not in the patients’ best interest

Encouraging Care Coordination and Medical Homes
CMS has to develop new HCPCS codes and begin reimbursing for care provided under those codes in 2015 for, “complex chronic care management services.” Of great significance here is that PAs and NPs will also be able to bill Medicare under these codes if they are able to meet criteria equivalent for physicians participating in a medical home model or similar model.
Purpose: to provide a means and mechanism to reimburse the work effort involved in providing care coordination and transitional care services
Risk: The financial incentive to push care coordination onto PAs and NPs results in overburdening and leads to worse overall patient care

Expanding Availability of Medicare Data
The bill increases access and use of Medicare claims data. This allows “qualified entities” to to sell claims data or analyses to authorized users for non-public purposes and allows qualified clinical data registries (QCDRs) access to claims data. Purpose: Streamline access, utilization and analysis of claims data that could provide valuable insights into physician practice patterns
Risk: The wrong type of data ending up in the wrong hands and thus putting patient privacy at risk

A minor detail. Means of providing revenue to fund provisions of the RSGR haven’t been thought out – or perhaps considered may be more appropriate. One idea being touted is to use the claimed savings from the Better Care, Lower Cost Act, which proponents claim will save as much as $25 billion a year. This bill also has attracted bipartisan support, but the CBO has not scored it yet – so there isn’t anything to hang your hat on there just yet. Short of something like that, however, funding will become another partisan and special interest charged debate that easily threatens to derail the RSGR bill.
Purpose: To provide the revenue need to cover costs of implementation
(HUGE) Risk: In a Robbing Peter to Pay Paul fashion Congress takes even more funding away from post-acute/long-term care providers


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