Revenue Cycle Management Blog | GroupOne Health Source

The End of SGR Cuts As We Know It

Written by Kaitlyn Houseman | January 14, 2014
Ending the sustainable growth rate cuts this year would be one resolution for Congress in 2014 that could dramatically change physician payment as we know it.  Recently, the House Ways and Means and Senate Finance committees reported out nearly identical bills to repeal the Medicare SGR formula.  With the end goal being to move Medicare at a faster pace to paying physicians based on quality improvement activities.   This is by far the closest Congress has ever gotten to reaching a bipartisan, bicameral accord on permanently repealing the SGR. 

So what will it take to permanently repeal the SGR?

Starting in January, the House must first reconcile the Ways and Means bill with an earlier bill approved unanimously in July by the House Energy and Commerce Committee, which shares jurisdiction with Ways and Means on Medicare physician payment issues.

Next, the House and Senate must reach agreement on an identical bill that can pass both chambers.  Possibly the biggest hurdle is to find about $120 billion in offsets (cuts or higher fees to someone else) to pay for it all.

Remember on December 27th when President Obama signed into law the legislation necessary to prevent the SGR related cut from taking place on January 1, 2014?  The 25% SGR cut was replaced with a 0.5% update through March 31, 2014. The thinking is that this will give Congress time to wrap up agreement on the permanent SGR legislation and budget offsets during the first quarter of next year.

The American College of Physicians has had a large part in developing many of the policies behind the behind the bills and getting positive changes in the bills as improvements are continuously sought after.  ACP supports the bills approved and has worked to organize coalition letters with AAFP and AOA, and the internal medicine coalition letter.

Although the bills are not yet perfected, they are a step in the right direction compared to current law –which has resulted in scheduled and growing cuts each year for more than a decade now.  Bob Doherty, senior vice-president, governmental affairs and public policy, American College of Physicians recently contributed the Top Ten Reasons to like the bills that repeal the SGR to KevinMD.com.  You can follow Bob on twitter @BobDohertyACP or subscribe to his blog here.

Top Ten Reasons to like the bills that repeal the SGR

1. End the SGR cuts forever.

2. Add $140 billion to physician pay over the next 10 years.

3. Cancel the 2016 PQRS meaningful use penalties.

4. Provide a 5% bonus to physicians in new alternative payment models, such as PCMHs and ACOs.

5. Create options for physicians to earn positive updates for participating in a new value-based payment program.

6. Combine and harmonize the existing Medicare PQRS, meaningful use, and Medicare value modifier index into a single VBP reporting program.

7. Establish a process to improve the accuracy of relative value units (RVUs).

8. Provide funding to help smaller practices successfully participate in the new value-based payment program or in alternative payment models.

9. Increase federal funding for development of quality measures

10. Helps ensure that Medicare patients will continue to have access to physicians, the most of all the changes it makes from current law.

2014 might finally be the year to end the never ending SGR battle and focus on more important aspect of patient care.