SGR Repeal Picking Up Steam in the House

Last week, Congresswoman Allyson Schwartz (D-PA) and Congressman Joe Heck, D.O. capitol web(R-NV) re-introduced the Medicare Physician Payment Innovation Act, which would repeal the sustainable growth rate formula (SGR) and replace it with a menu of payment options determined at a later point by the Centers for Medicare and Medicaid. Specifically, the bill aims to:

  • Permanently repeal the SGR formula;
  • provide annual positive payment updates for all physicians for four years;
  • ensure access to preventive care, care coordination and primary care services through increased payment updates for those services;
  • aggressively test and evaluate new payment and delivery models;
  • identify a variety of unique payment models to provide options for providers across medical specialties, practice types and geographic regions;
  • stabilize payment rates for providers who demonstrate a commitment to quality and efficiency within a fee-for-service model; and
  • ensures long-term stability in the Medicare physician payment system through predictable updates that accurately reflect the cost and value of providing health care services in coordinated care models.

Unlike the last year’s bill, this legislation does not include a pay-for to offset the cost of repealing the SGR. The previous proposal included a contentious measure that would have allocated Overseas Contingency Operation (OCO) funds to offset the cost of repeal. According to Rep. Schwartz, the pay-for was removed to signal her willingness to compromise with Republicans to identify a new mechanism to pay for the expected cost of repealing the SGR.

Last year, NASS sent a letter to Rep. Schwartz citing concerns over the legislation’s attempt to phase out fee-for-service for physician payments and the deferential payments to primary care physicians over specialists. A copy of this letter can be found here.

In addition to the Schwartz-Heck announcement, Energy and Commerce Committee Chairman Fred Upton (R-MI), Ways and Means Committee Chairman Dave Camp (R-MI), Energy and Commerce Health Subcommittee Chairman Joe Pitts (R-PA), Ways and Means Health Subcommittee Chairman Kevin Brady (R-TX) and Health Subcommittee Vice Chairman Michael C. Burgess, MD (R-TX) released their committees’ “framework” to repeal the Sustainable Growth Rate. According to the Chairmen, this framework is based on “extensive stakeholder input” over the past couple of years. The proposal is broken down into three phases and seeks to:

  • PHASE 1: Repeal the SGR and provide a period of predictable, statutorily-defined physician payment rates;
  • PHASE 2: Reform Medicare’s fee for service (FFS) physician payment system to reward physicians who provide high quality care; and
  • PHASE 3: Build upon the improvements made in Phase 2 by also rewarding physicians who deliver efficient care.

While details of this proposal have yet to be determined, the Committees’  are allowing the public an opportunity to comment on their proposal by the end of February. In addition, NASS staff was invited by the two committees to attend a stakeholder briefing on Capitol Hill to comment on the proposal.

NASS staff will continue to closely monitor any developments regarding the SGR and report on them as they become available.

A copy of the Medicare Physician Payment Innovation Act can be found here.

A copy of the Energy and Commerce and Ways and Means framework can be found here.

CBO Score Brightens SGR Repeal Prospects

On Feb. 5, the Congressional Budget Office (CBO) adjusted its estimated cost of freezing Medicare Physician reimbursements, lowering it expected pay out by $100 billion. In August 2012, CBO had projected that the 10-year cost to replace the Sustainable Growth Rate Formula (SGR) would be $245 billion. The new estimate, $138 billion, makes the task of repealing the SGR somewhat easier for lawmakers to handle, as Congress continues to search for ways to repeal the flawed formula. Recent meetings with House Energy and Commerce and Ways and Means Committees have suggested that this number has provided some relief for lawmakers and has enhanced the prospect of repeal during this Congress.

To view the CBO report, click here.

CMS Unveils Physician Payment Sunshine Rule

Last week, CMS released a final rule, the National Physician Payment Transparency Program: Open Payments, which is designed to reduce conflicts of interest by requiring the manufacturers of drugs, devices and other medical supplies to report certain payments provided to physicians or teaching hospitals. Reports to CMS are due by March 31, 2014 and CMS will release the information on a public website by September 30, 2014. The release of the rules comes after several complaints from providers, industry and lawmakers over CMS’ delay in  issuing this rule. Physician groups, have long pressed CMS to exempt continuing medical education payments from being part of disclosure requirements in the final rule. In addition, the final rule will allow physicians an additional 15 days to settle any discrepancies about published information before being published following a 45-day review.

A copy of the final rule can be found here.

Senate Finance Committee Release Report on Waste, Fraud and Abuse

Senate Finance Committee Chairman Max Baucus (D-MT), Ranking Member Senator Orrin Hatch (R-UT) and other members of the Committee released a report providing the recommendations made by over 160 health care organizations on means to improve federal efforts to combat waste, fraud and abuse under Medicare and Medicaid. Five themes emerged from the suggestions: how to reduce improper payments; how to improve beneficiary protections; how to reduce audit burdens; how to improve data management; and how to improve enforcement. Among the several recommendations, the report called for making numerous process changes to how the various CMS audit contractors operate to ensure they are doing so efficiently and effectively; balancing the incentives for Medicare contractors to identify overpayments with penalties for contractors whose findings are overturned on appeal through the CMS administrative process; and creating an advisory panel to provide clinical input as a component of contractor oversight. Some of the findings in this report are welcomed news, as NASS has continued proactively monitored legislation addressing Medicare Recovery Audit Contractors (RAC’s) overreach.

A copy of this report can be found here.

White House Re-nominates Tavenner

Last week, President Obama announced that he will re-nominate Marilyn Tavenner to become the Administrator of the Centers for Medicare and Medicaid Services. Currently, Tavenner serves as the Acting Administrator. The Senate has not confirmed a CMS administrator since 2006, and it’s unclear whether Tavenner has enough support in the Senate to be confirmed, though reports indicate that she has gained the favor of some Republicans during her tenure as acting administrator.