Bill to repeal SGR moves forward in House

A House subcommittee approved draft legislation that calls for eliminating the sustainable growth rate (SGR) formula and replacing it with a system that lawmakers say will improve the quality and efficiency of care. The effort drew praise as well as concerns from the cardiology and broader medical community.

The SGR was initiated in 1997 to limit growth in Medicare costs, but when Medicare spending on physician services spiked in 2002, Congress temporarily averted fee reductions. The pattern has persisted for a decade, leading most recently to a proposed across-the-board cut of 22 percent or more that also was suspended.

“The time of temporary fixes and kicking the can down the road has ended,” said Health Subcommittee Chairman Joe Pitts, R-Pa., who added that it “places us on a path to paying for innovation and quality, not volume of services, and puts doctors not bureaucrats, back in charge of medicine.”

The framework includes six key components. They are:

Period of stability: An annual statutory update of 0.5 percent per year for 2014 through 2018. The draft calls for continuation of the Physician Quality Reporting Program, the Electronic Health Record Incentive Program and quality measure development. Providers can choose to use current or new payment models. 

Rewarding performance: An annual update of 0.5 percent starting in 2019. Physicians choosing a fee-for-service model will receive an additional update adjustment based on performance assessed through quality measures and clinical practice improvement activities. Provider performance also will be assessed, with high performers getting a 1 percent bonus payment and low performers getting a 1 percent reduction in payments. Those who don’t report quality data will face payment reductions.

Alternative payment models: New models are in various stages of development and rollout and the bill allows for novel approaches.

Supporting care coordination and medical homes: New payment codes for complex chronic care management for providers treating individuals with complex chronic conditions.   

Expanded data availability for care improvement: Expanded access to Medicare data for certain certified entities to facilitate the development of alternative payment models and care improvement. 

Improving payment accuracy: Compensation for the cost of submitting data that helps Medicare verify accuracy. From 2016 to 2018, Medicare is expected to reduce projected expenditures by 1 percent annually by identifying improperly valued services.  

Rule of construction regarding standards of care: To ensure that “guidelines or standards under any federal health care provision under the Affordable Care Act, Medicare, and Medicaid shall not be construed to establish the standard of care or duty of care owed by a healthcare provider to a patient in any medical malpractice or medical product liability action or claim.”

Numerous medical societies lauded the effort. In a letter to the chairmen and ranking House members, the American College of Cardiology (ACC) President John G. Harold, MD, described the legislation as “a giant step forward from a decade of inaction.” In a statement to the House Energy and Commerce Committee, he wrote, “We are especially encouraged to see implementation of a stable payment system that rewards quality.”

Harold also highlighted areas of concerns in the letter. The ACC viewed the 0.5 percent update as too low and recommended tying updates to the Medicare Economic Index. An incentive program designed to reward performance was complex “and may be counterproductive in the long run” and malpractice reforms were still needed to lower insurance premiums.  

Douglas E. Wood, MD, president of the Society of Thoracic Surgeons, complimented the legislation’s recognition of the usefulness of clinical registries and provisions that will allow qualified registries to gain access to Medicare administrative data. “We also hope to revisit the issue of allowing registries to access de-identified patient outcomes data contained in the Social Security Death Master File,” he wrote.  

As members of the Alliance of Specialty Medicine coalition, the Society for Cardiovascular Angiography and Interventions and the American Society of Echocardiography wrote that some processes as described in the framework may be duplicative and vulnerable to biases.  

The draft legislation is available here.