AGA Washington Insider

A policy blog for GIs

SGR Repeal Compromise Legislation Introduced

The three authorizing committees with jurisdiction over Medicare Part B physician services reached an agreement and unveiled a package to repeal the sustainable growth rate formula (SGR). The legislation, H.R. 4015/S. 2000, the SGR Repeal and Medicare Provider Payment Modernization Act, reflects a compromise among the Senate Finance, House Ways and Means, and House Energy and Commerce Committees. This legislation would repeal the SGR, provide a five year .5 percent update  and transition physicians to a more value-based payment system.

The AGA was pleased that the legislation changed the quality improvement programs from a budget neutral system that pits physicians against one another to a system that encourages quality improvement among all physicians. The AGA and the entire physician community are urging Congress to enact this legislation before the temporary physician patch expires at the end of March.

Key provisions of which gastroenterologists should be aware include:

  • Repeals the SGR formula.
  • Provides a five year .5 percent update.
  • Creates a Merit-Based Incentive Payment System (MIPS), which includes performance thresholds that allow all physicians to meet and earn bonuses as opposed to earlier versions that created winners and losers among physicians.
  • Delays implementation of the MIPS program until 2018 to allow all physicians to be prepared for the new value-based system.
  • Increases the MIPS funding pool, which is no longer budget neutral; the penalties for those who fall in the lowest performance threshold have been capped at a maximum of 9 percent.
  • Includes a 5 percent added incentive payment for physicians in alternative payment models (APMs). Participants need to receive at least 25 percent of their Medicare revenue through an APM in 2018 and 2019. The legislation incentivizes participation in private payor APMs and allows for percentages  from private payors to be included in the calculation.
  • Establishes a technical advisory committee to review and recommend physician-developed APMs based on criteria developed through an open comment process.
  • Provides $40 million in funding for technical assistance to small and rural practices with 15 or fewer professionals.
  • Provides legal protections for physicians who adhere to clinical guidelines and quality improvement requirements.
  • Expands the list of misvalued codes that the HHS secretary can identify to include: codes that account for a majority of spending under the physician fee schedule; substantial changes in procedure times; changes in sites of services or significant difference in payment between sites of service; services that may have greater efficiencies when performed together; or with high practice expense of high cost supplies.
  • Sets an annual target for identifying misvalued services of .5 percent of the estimated expenditures in physician services from  2015 through 2018.
  • Phases in downward relative value unit adjustments for a service of 20 percent or more (compared to the previous year) over a two-year period.
  • Provides the HHS secretary the authority to smooth RVUs within a group of services.
  • Requires the Government Accountability Office to study the AMA/RUC processes for making recommendations on the valuation of physician services.

The committees listened to the concerns of the AGA and physician community and were accommodating of changes in two key areas — the payment updates of .5 percent for five years and eliminating the budget neutrality of the quality improvement programs. We are still concerned with the increased authority over the misvalued codes section, although the target was lowered from 1 percent to .5 percent.

The AGA and the entire physician community continue to call on Congress to enact this bill before the end of March.  The legislation represents a bipartisan and bicameral compromise and establishes a path toward higher-performing Medicare program. Now is the time to enact this legislation since another patch would continue to add to the deficit and the unsustainable path of payment instability. Stay tuned for ways you can help AGA call on Congress to fix the SGR once and for all and support H.R. 4015/S. 2000.


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