On Thursday, February 7, 2013, the House Committees on Ways and Means and Energy and Commerce jointly distributed a three pronged plan (PDF) for repealing and replacing the Sustainable Growth Rate (SGR) formula.  This action marked the first step in a long, methodical effort by the House of Representatives to finally alleviate physicians from this flawed reimbursement formula.  Although the first document outlining an approach for repealing and replacing the SGR was jointly issued, the House Energy and Commerce Committee primarily led the initial legislative efforts to reform the way physicians are reimbursed through Medicare.  The first seven months of the 113th Congress witnessed the Energy and Commerce Committee holding several Congressional hearings and soliciting comments from various health care stakeholders on numerous preliminary SGR concept documents and draft legislative language.  

The Committee's extensive process of developing a comprehensive, bipartisan legislative proposal to repeal the SGR culminated on July 31 when Representatives Michael Burgess, MD (R-TX), Fred Upton (R-MI, Chairman of the Energy and Commerce Committee),  Joe Pitts (R-PA, Chairman of the Energy and Commerce Health Subcommittee), Henry Waxman (D-CA, Ranking Member on the Energy and Commerce Committee), Frank Pallone (D-NJ, Ranking Member of the Energy and Commerce Health Subcommittee) and John Dingell (D-MI) introduced H.R. 2810, the Medicare Patient Access and Quality Improvement Act of 2013.

In lieu of the scheduled reimbursement cuts associated with the SGR, H.R. 2810 seeks to accomplish three primary goals: providing physicians with a period of budgetary certainty, developing a modified fee-for-service system, and accelerating the movement towards reimbursing physicians through alternative payment models. 

Phase 1 of the plan focuses on repealing the SGR, as well as providing a statutorily defined five year period of “stable” payment rates.  Between 2014 and 2018, payments to physicians who treat Medicare patients will increase by 0.5% in comparison to current rates.

Phase 2 of the SGR reform plan focuses on reforming the current fee-for-service payment system in favor of rewarding physicians who “provide high quality care." Starting in 2019, under the newly created Quality Update Incentive Program (QUIP), physicians who successfully meet a series of quality measures and clinical improvement activities within a self-selected peer cohort have the opportunity of gaining an additional 1% increase in Medicare payments.  Conversely, physicians who score poorly on this collection of quality measures and clinical improvement activities face a 1% reduction in Medicare payment rates.  Physicians who elect not to participate in the modified fee-for-service system are automatically subjected to a 5% reduction in Medicare payment rates.

Finally, under Phase 3 the legislation creates a framework for physicians to develop, test, and seek approval from the Secretary of Health and Human Services (HHS) for alternative payment models.  Although patient centered medical homes, accountable care organizations, and variations on either episodic or bundled payments are the most common form of alternative payment models currently employed within the health care system, H.R. 2810 thoroughly encourages physicians to collaborate and develop new, innovative ways to treat patients.  Physicians can opt-out of the traditional or modified fee-for-service system at any time in favor of an approved alternative payment model.  The policy parameters of the approved alternative payment model govern reimbursement for participating physicians.

Thanks to the tireless efforts of ACR’s physician leadership and membership working in concert with the Federal Government Relations Department, H.R. 2810 included provisions specifically addressing the 25% professional component (PC) multiple procedure payment reduction (MPPR), as well as the expansion of web-based clinical decision support (CDS) tools.  With respect to the PC MPPR, language was included mandating that the Centers for Medicare and Medicaid Services (CMS) finally disclose the specific data that was used in the Calendar Year 2012 Medicare Physician Fee Schedule Final Rule when the 25% reimbursement cut was initially proposed. To date, CMS has never disclosed a line-by-line data analysis in justification of the PC MPPR and ACR has consistently disputed the existence of such data.  While the provisions added to H.R. 2810 remain silent on the actual 25% PC MPPR, if enacted, inclusion of this language ensures that Congress is properly overseeing CMS with respect to this policy and will further the College’s efforts to ultimately repeal this imaging reimbursement cut.

H.R. 2810 also mandates that the Secretary of Health and Human Services provide a report to Congress on the effectiveness of clinical decision support (CDS) tools within the Medicare system.  This report, which must be completed a year after the bill’s enactment, must also include specific recommendations for how CDS tools should be employed. It is important to note that Energy and Commerce Committee decided not to outline how Congress plans to cover the cost of repealing the SGR.  Instead, the Energy and Commerce Committee elected to develop the key characteristics of the new physician reimbursement system while leaving the decisions over financial offsets to both the House Ways and Means and Senate Finance Committees. 

Legislative Update on H.R. 2810, Medicare Patient Access and Quality Improvement Act of 2013

In late July 2013, H.R. 2810 unanimously passed out of committee by a vote of 51-0, however, a new bipartisan, bicameral SGR repeal bill released by the Senate Finance and House Ways and Means Committees ultimately became the legislative product endorsed by the Energy and Commerce Committee to eliminate this antiquated system of Medicare physician reimbursement. For more details on H.R. 4015/S. 2000, the SGR Repeal and Medicare Provider Payment Modernization Act, including the appropriateness criteria and PC MPPR provisions within this bill, please click here.

Click on a variety of links below for additional information on ACR's participation within the House of Representatives’ process for repealing and replacing the SGR.