US Lawmakers Reach Bipartisan Agreement on SGR

A bipartisan agreement has been reached regarding the sustainable growth rate (SGR) and Medicare reimbursement model. It was only a few months ago that the House Ways and Means, and Senate Finance committees, considered how the administration might best shift from fee-for-service care models to models that are value-based. The decision will repeal Medicare's current volume-based formula and replace it with a value-based system that would provide stable payment increases for 5 years.

More formally known as the SGR Repeal and Medicare Provider Payment Modernization Act, the bill will provide physician payment increases of 0.5% annually between 2014 and 2018. The 2018 payment rates will then be maintained through 2023 as physicians adjust to the new model, which incentivizes payments based on their ability meeting certain quality benchmarks.

“This proves that the 2 parties and the 2 chambers can work together when policy is put before politics,” Rep. Joe Pitts (R-PA), chairman of the House Energy and Commerce Health Subcommittee, said. “We are, however, only halfway there. We only have agreement on policy. We still have to figure out how to pay for it, and I am under no illusions about how difficult that may be. We are going to do our best. We've already done more than most people thought was possible."

The agreement intends to incentivize care coordination, promote transparency of physicians’ payment data, and emphasize the development of collaborative quality measures. It will also provide a 5% payment bonus to providers who receive at least a quarter of their Medicare revenue from alternative payment models such as accountable care organizations and patient-centered medical homes in 2018.

"To be eligible for higher payments, providers will need to document and adhere to a number of different quality standards," said David Howard, PhD, health policy professor at Emory University in Atlanta. "Decisions about what constitutes high-quality care will become politicized. It is regulation via payment reform."

Details of how lawmakers will finance the $126 to $150 billion cost to repeal and replace SGR are still emerging.

Around the Web

Bipartisan Plan Calls for SGR Repeal, Replaced by Payment Updates, Value-Based Care [Modern Healthcare]

SGR Fix: No Pay Cut! [MedPage Today]

US Lawmakers ReachAccord on Paying Doctors for Medicare [The Los Angeles Times]