AGA Washington Insider

A policy blog for GIs

Congress to Address SGR Reform, Budget Priorities

The Senate Finance Committee and the House Ways and Means Committee are scheduled to mark up the latest legislative framework to repeal the sustainable growth rate (SGR) formula, which is used to calculate physician payment updates under Medicare, and transition physicians to a system that links payments on quality measures and outcomes. Last week, the Senate Finance and Ways and Means Committees staff held a meeting with physician stakeholders to discuss their joint proposal and some of the changes that they made based on feedback from physicians.

In general, the revised draft would replace the SGR with a value-based pay for performance system (expanded to other non- physicians) with a chance for bonus payments to offset the freeze of physician payments for ten years. The AGA and other physician organizations are extremely concerned with this provision since physician reimbursement has not kept pace with medical inflation and practice costs for the past twelve years. Additionally, given the recent proposed payment cuts to upper endoscopy codes for gastroenterologists, a ten year freeze would represent a cut for GI.

Some significant changes in the draft:

  • Earlier proposed 10 percent penalty for failed reporting requirements for surveys of misvalued codes was dropped.
  • Bonus/penalty adjustments were narrowed in 2017-2020 with HHS given discretion to allow adjustments above 10 to 12 percent, beginning in 2021.
  • Physicians would get credit for improving quality and use of resources from one year to the next.
  • The inclusion of increased incentives for small practices to help them move to alternative payment models or the value-based purchasing program.
  • Introduction of a “partial qualifying Alternative Payment Model (APM) participant” category to allow providers to choose to participate in the value-based purchasing program and get a bonus.

Of note, the Congressional Budget Office (CBO) released an updated cost estimate for the House Energy and Commerce Committee SGR reform bill totaling $153.2 billion over ten years — a significant reduction. CBO indicated that freezing payments, rather than increasing them by 0.5 percent per year for five years, would reduce the cost to $116.5 billion. Certainly, the lower CBO score helps the chances of a permanent fix to the SGR.

Looming Budget Negotiations

Also on the agenda is the need to reach an agreement on a budget deal to fund the government for fiscal year 2014, the current continuing resolution expires on Jan. 15, and also address the scheduled cuts to Medicare physician payments which are effective Jan. 1. House Budget Chair Paul Ryan, R-WI, and Senate Budget Chair Patty Murray, D-WA, have been working to reach a budget agreement. Sources indicate they are close to reaching a deal on a $1 trillion budget and replacing sequestration, although those details have yet to be finalized. Both sides would like to replace sequestration, or automatic cuts, but have differing views of the amount that should be allocated.

The AGA continues to express our concerns to Congress on the proposed 10 year freeze for physician payments and also has advocated that Congress fund the NIH at adequate levels given the cuts it has sustained and its impact on research. We will continue to monitor these issues closely and will keep you up to date on any new developments.

Look for more updates on these critical issues facing gastroenterology on the AGA Washington Insider and AGA eDigest.

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