Republican proposal would eliminate sustainable growth rate

Washington-In what could be a significant development in the battle over the sustainable growth rate (SGR) formula, a new proposal has emerged from Capitol Hill offering hope for reforming the SGR, the cause of threatened annual reductions in physician Medicare payments over the past several years.

Republican leaders of the House Energy and Commerce and Ways and Means Committees have issued a “framework” for SGR repeal and reform, which would occur in three phases. That development occurred as lawmakers and the White House battled over sequestration, which slashed the federal budget across the board, including a 2% reduction in Medicare payments effective March 1.

In a letter to the House Ways and Means Health Subcommittee, David F. Penson, MD, MPH, chair of the AUA’s Health Policy Council, welcomed the “physician-friendly concepts outlined in the proposal” and offered recommendations for improvement. The initiative was welcomed by physicians’ organizations, weary from annual threats of payment reductions and last-minute reprieves by Congress.

The proposal was released by Energy and Commerce Chairman Fred Upton (R-MI), Ways and Means 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. Burges, MD (R-TX).

They said the framework improves Medicare’s outdated system by:

• repealing the SGR and eliminating the estimated 25% across-the-board rate cut slated for 2014 and any future rate cuts called for under the SGR

• establishing a period of predictable, statutorily defined payment rates

• empowering physicians to determine quality and efficiency measures that are clinically meaningful for Medicare beneficiaries

• rewarding physicians who deliver high-quality and efficient care

• requiring the Centers for Medicare & Medicaid Services to provide timely feedback and data to physicians, enabling physicians to make adjustments to improve patient care and their assessed performance

• providing reimbursement options so physicians can select the Medicare payment system that best fits their practice

• engaging physicians in efforts to improve, reform, and update Medicare’s physician reimbursement system.

The phased approach to implementation would be as follows:

Phase 1. Repeal SGR and provide a period of predictable, statutorily defined payment rates. While the duration and size of the payment rates to be established are not yet determined, this phase will provide physicians time to transition to a new system.

Phase 2. Reform Medicare’s fee-for-service system to better reflect the quality of care provided. After the period of stability, payment updates will be based on performance “on meaningful, physician-endorsed measures of care quality and participation in clinical improvement activities,” such as reporting clinical data to a registry or employing shared decision-making tools. Medical specialty societies will develop “meaningful quality measures and clinical improvement activities using a standard process.”

Phase 3. This phase includes further reform to Medicare’s fee-for-service system to also account for the efficiency of care provided.

“The proposal focuses on permitting physicians to make health care decisions, based on their expertise, that are most applicable to their specific patient populations,” Dr. Penson said in the letter to the subcommittee. “As such, physicians should be empowered to determine quality measures that are clinically meaningful to their patients and rewarded for providing high quality and efficient care.”

How will reforms be financed?

Dr. Penson expressed some concerns with the framework-including the lack of specificity regarding how the reforms will be financed. The committee leaders’ document stated reform must not increase the deficit; be applicable to all specialties, practice arrangements, and geographic locations; and provide motivation to providers to adopt reforms and strengthen Medicare for seniors. But it did not say where the money would come from.

Dr. Penson outlined numerous additional concerns, pointing out that it takes time and money to comply with the current evaluation and endorsement process for measures used under today’s federal reporting programs.

“Physician specialty societies often do not have the staff, technical capacity, or finances to devote to such rigorous and time-consuming objectives,” he explained.

“Unfortunately, AUA’s experience with the current measure endorsement process has been frustrating, yet not unique,” Dr. Penson wrote. “Many specialty societies are hesitant to invest significant resources in measure development, only to have their measures rejected by the National Quality Forum and effectively prohibited from inclusion in any federal quality program.”

Regarding shared decision making, Dr. Penson said the AUA “has long been a supporter” of such tools, including the BPH Symptom Score and patient counseling and engagement.

Dr. Penson said the proposal to align Medicare payments with private payer initiatives “would be most welcome,” noting that physicians are overburdened with reporting requirements.

“Data entry should be minimized so that reporting for one initiative qualifies for all quality programs and eliminates the need for multiple reporting,” he said, cautioning that if the program is made too complex, many physicians may opt out of Medicare, leading to “a serious access problem.”

Finally, Dr. Penson said the AUA supports the proposal’s inclusion of medical liability reform, repeal of the Independent Payment Advisory Board, and private contracting in the Medicare payment system, adding that the AUA looks forward to additional details as the proposal is fine-tuned.UT