Friday, February 7, 2014

SGR Compromise Emerges from Committees

Lawmakers released a final version of legislation that would repeal the current Medicare Physician Payment schedule, the Sustainable Growth Rate (SGR), and replace it with a permanent fix.

The plan introduced Thursday is a compromise between the Senate Finance Committee and House Ways & Means and Energy & Commerce Committees, all of which had their own versions of the final proposal.

Important items of compromise include a .5 percent payment update for physicians in each of the next five years, a comprehensive incentive program known as Merit-Based Incentive Payment System (MIPS), and creation of committees that will review any new alternative payment methods (APMs).

Lawmakers and their staff hope that, if passed, the proposed legislation will eliminate the need for an annual “doc fix,” wherein doctors’ payments had to be updated to avoid a 24 percent cut in Medicare reimbursement rates, while simultaneously moving toward programs that will encourage more efficient patient care.

After weeks of intense negotiations by health staffers, a final plan began to take shape early in the week. Meetings on Wednesday and Thursday with the GOP Doctors’ Caucus quelled enough of the concerns from the group to garner its initial support.

The group of Republican physicians who have been since elected to serve in Congress expressed skepticism with the .5 percent update for five years. Rep. Phil Gingrey (R-GA), co-chair of the group, said the caucus came to the table “kicking and screaming.”

Though the committees managed to forge a proposal that placated relevant parties, many deadlines still exist that put final passage in jeopardy. The current short-term patch, passed as part of the budget deal struck last December, expires March 31.

Further complicating matters, Senate Finance Chairman Max Baucus (D-MT), a key negotiator on the bill, was confirmed Thursday to become the next ambassador to China. Sen. Ron Wyden (D-OR) is expected to take his position as Chairman of the committee and de facto SGR reform sponsor.

The final hurdle for reform will be how the bill is financed. Lawmakers estimate that the proposal will cost around $130 billion over ten years, but the Congressional Budget Office is currently reviewing it and has yet to release an official figure.

Health staffers released an unofficial list of potential cuts to offset the cost of the legislation, but attached the disclaimer “not necessarily endorsed by SFC [Senate Finance Committee] Staff.”

AHCA is supportive of a permanent fix, but only one that does not use skilled nursing and assisted living as an offset. We continue to monitor negotiations while pay-fors are being developed, ensuring that funding for long term and post-acute care is preserved.

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