Tying Physician Payments to Quality Performance
Pay for Performance legislation has been introduced in the Senate by Finance Committee Chairman Grassley and Ranking Minority Baucus. The “Medicare Value Purchasing Act of 2005” (S. 1356) would establish a two-phase implementation of paying various providers (including home health agencies and end-stage renal disease facilities) bonuses for delivering high quality care to patients.
On the House side, ACR staff attended a briefing Wednesday where Chairwoman Nancy Johnson of the Ways and Means Health Subcommittee unveiled a draft bill that would repeal the sustainable growth rate (SGR) formula used to determine physicians' Medicare reimbursements and replace it with a value-based purchasing system, her version of P4P. She stated that she hopes to introduce a final measure before the August recess. ACR staff was allowed to briefly view the draft, but was not able to keep a copy.
In Chairwoman Johnson’s draft bill, instead of the scheduled Medicare pay cut of approximately 5 percent, physicians would receive an increase in 2006 under the draft. Also in 2006, specialty medical societies would be able to offer input on quality measures to a “consensus-building organization.” This consensus building organization is believed to be the National Quality Forum of which ACR is a member. This input would be used by the Department of Health and Human Services to develop regulations on process and efficiency measures.
In 2007 and 2008, physician groups that report on performance criteria would receive a full payment update, and those that do not would receive a partial or a smaller update. In 2009, full reimbursement updates would be reserved for groups that report on performance and show improvements. Chairwoman Johnson and Ways and Means staff stated that these dates may change.
The fate of the SGR repeal portion of Chairwoman Johnson’s bill will rely heavily on whether CMS grants Chairman Bill Thomas’ and Chairwoman Johnson’s request to remove drugs from the current calculation of the SGR. Chairwoman Johnson believes this will account for roughly $111 billion of the $154 billion price tag associated with repealing the SGR, thus significantly lowering the congressional cost of an SGR fix. Chairwoman Johnson has also announced that she will hold a hearing on July 21 to discuss her concepts. CMS Administrator Mark McClellan, M.D. is the only confirmed witness to date.
