A proposed House bill to repeal the SGR and prevent a 30% cut to Medicare reimbursements at the end of this year was introduced last week. The Medicare Physician Payment Innovation Act of 2012, proposed by Rep. Allyson Schwartz (D-PA) and Rep. Joe Heck DO (R-NV), would use savings from the military pull-out from Iraq and Afghanistan to cover all costs.

The bill’s timetable for reforming the Medicare physician payment system is a slightly adjusted version from the plan Schwartz called for last fall. If passed, this legislation allows payment rates to stay at 2012 levels for one year. Then from 2014 to 2017, primary care, preventive and care-coordination services would get a 2.5% annual increase, while reimbursement for other services would rise 0.5%.

Moreover, in 2018, physicians would get rewarded for value over volume, although Medicare still will pay physicians on a fee-for-service basis at 2017 levels. Then, physicians still using fee-for-service will face 2% pay cuts in 2019, 3% in 2020, 4% in 2021 and 5% in 2022, with fee-for-service rates frozen at 2022 levels going forward.

The Alliance is in the process of drafting a statement in response to this latest version. While there are some improvements in this newer version, NASS is still evaluating how penalties for physicians continuing with fee-for services after 2017 will be affected. At this time, it appears very unlikely that this bill will pass by the end of the year.

Senate Finance Committee Hosts Roundtable Discussion on SGR

Last Thursday, NASS attended the Senate Finance Committee roundtable discussion on “Medicare Physician Payments: Understanding the Past so We Can Envision the Future.” The purpose of this discussion was to inform the Committee about how to improve the delivery of payments to physicians by looking at how past policies lead to the current crises in the Medicare payment structure.

Former CMS administrators were invited to provide expert testimony into the problems and how best to address physician reimbursements. The panel included Gail Wilensky, Ph.D., Senior Fellow, Project HOPE, Bethesda, MD, Bruce Vladeck, Ph.D., Senior Advisor, Nexera, Inc., New York, NY, Thomas Scully, J.D., Senior Counsel, Alston & Bird LLP, Washington, DC, and Mark McClellan, M.D., Ph.D., Senior Fellow, Brookings Institution Washington, DC.

The members of the panel all agreed that the SGR is flawed and needs to be replaced with a more effective model. However, some expressed variation of their opinions when the discussion turned toward instituting new payment models. The panelist also agreed that medical liability reform was badly needed to prevent the over utilization of defensive medical practices and to protect physicians from malpractice lawsuits.

Among other suggestions that came from the panel were:

  • The need to utilize more piloting programs such as the ACE program;
  • making Accountable Care Organization’s (ACO’s) more physician rather than hospital based;
  • the need to move away from fee-for-service option (though most panelist agreed that FFS will be around for a long time);
  • movement  toward bundled services beginning with chronic diseases;
  • developing more options that reward quality and efficiency;
  • direct physician payments and increase share of physician services;
  • depoliticize the RUC, possibly looking for an alternative group to define coding;
  • develop more incentives that positively impact behaviors and reward physicians that do; and
  • develop separate payment schemes that for rural and urban settings.

At the close of the discussion, Senator Baucus (D-MT) asked the panel to come up with possible solutions to fix the SGR by the end of this year, and to provide recommendations about alternatives to the SGR to begin transitioning within the next five years. The group will submit their ideas to the Committee within a month, where another discussion is expected to take place. NASS will continue to monitor these discussions as they arise.

Physician Payments Sunshine Act Delayed

CMS announced that it will delay the implementation of the Physician Payments Sunshine Act and begin collecting data in 2013. A final rule is expected to be promulgated later this year, despite a request from Senators Kohl and Grassley that the rule is issued before June.