Skip to content Skip to navigation

SGR fix ahead

March 17, 2015
by Bob Gatty
| Reprints

House Republican and Democratic leaders have negotiated a plan to repeal the Medicare sustainable growth rate (SGR) formula, but time for a solution is short, as a 21 percent reduction in Medicare physician payments is slated to take effect April 1 if Congress does not act.

Although the atmosphere for agreement on a permanent solution has turned positive, consternation exists among conservative House Republicans, who insist that the $200 billion, 10-year fix must be paid for. So, the possibility remains for an 18th consecutive temporary patch or, perhaps, some sort of extension from the Centers for Medicare & Medicaid Services (CMS), if it appears a post-deadline solution is imminent.

It is interesting to note, however, that although finding a solution is certainly important for the immediate future, policy changes now under way, prompted in large measure by the Affordable Care Act (ACA), may make the issue increasingly irrelevant in the future.

According to knowledgeable sources, only about $70 billion of the estimated $200 billion 10-year cost would be offset by spending cuts to providers and changes in benefits under the plan, reportedly including a means test under which wealthier beneficiaries would pay more for their coverage. Previous efforts to repeal the SGR have been thwarted by the inability of Congress to agree how the cost would be covered.

As the negotiations continued on Capitol Hill, health-related organizations were attempting to include their pet provisions in the legislation.

For example, hospital lobbyists were trying to modify a penalty for readmitting a higher-than-average number of discharged patients by including a provision requiring CMS to account for patients’ socioeconomic status when calculating risk-adjusted readmission policies.

Seeking therapy cap relief

The American Health Care Association/National Center for Assisted Living (AHCA/NCAL) has been pushing to end therapy caps, which also face a March 31 deadline, with passage of the Medicare Access to Rehabilitation Services Act. Lobbyists for the organization have hoped to use the drive to reform the SGR to also take care of the therapy cap problem.

The organization sponsored provider visits with Congress to also seek major changes to improve the present manual medical review, or MMR, process for therapy claims, which it says causes unnecessary burdens on beneficiaries and providers.

“Our goal was to set clear markers of support for the dual therapy issues—ending therapy caps and restoring efficiencies and common-sense program integrity practices to claims review,” said Mark Parkinson, AHCA/NCAL president and CEO. “Our members visited 50 congressional offices to signal our support and expectation that in any new system there will be safeguards to ensure compliance and that any MMR fixes will be retroactive.”

Leaving SGR behind

For 17 years, Congress has been wrestling with the SGR problem, and each year it has enacted some sort of temporary patch to prevent untenable physician pay cuts from taking place. Now that lawmakers appear to be ready to permanently fix the problem, time appears to be running out on the traditional fee-for-service payment system anyway.

The U.S. Department of Health and Human Services (HHS) in January announced goals and a timeline to move the Medicare program, and the healthcare system at large, toward paying providers based on the quality, rather than the quantity of care they give patients.

HHS set a goal of tying 30 percent of traditional fee-for-service payments to quality or value through alternative payment models, such as accountable care organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to such models by the end of 2018.

HHS wants to tie 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018 through programs such as Hospital Value-Based Purchasing and the Hospital Readmissions Reductions Programs.

In connection with these objectives, HHS Secretary Sylvia M. Burwell in late January announced creation of a Health Care Payment Learning and Action Network to work with private payers, employers, consumers, providers, states and state Medicaid programs, and other partners, to expand alternative payment models in their programs.

The new goals and deadlines are intended to improve physician payment methods, promote innovation in care delivery and encourage information sharing among medical professionals and patients/residents to improve decisions about care—all consistent with the ACA.

Health IT a key

In late February, representatives of numerous health-related organizations, federal agency officials and industry experts attended a Capitol Hill session sponsored by the Capitol Hill Steering Committee on Telehealth and Healthcare Informatics to discuss the use of health information technology (IT) by long-term and post-acute care providers as part of the effort to improve quality outcomes and ensure continuity of care.

“Health [IT] platforms that allow providers and payers to communicate and share data are essential to ensuring continuity of care and facilitating close relations between healthcare delivery partners,” Parkinson said.