‘Doc fix’ price tag mounts

One area in which Congress has acted in a bipartisan manner is in crafting a permanent solution to the "doc fix," the sustainable growth rate formula. The latest - a bill to repeal and replace the SGR with a more stable physician payment system - received unanimous approval by the Energy and Commerce Committee this summer and is now awaiting a full House vote. Two other House committees may offer their versions of the bill, called the Medicare Patient Access and Quality Improvement Act, H.R. 2810.
Healthcare organizations, such as the American Medical Association (AMA) and the Medical Group Management Association (MGMA), are encouraged. "There's been more bipartisan progress this year on permanently repealing the SGR than we're ever seen before," said AMA President Ardis Dee Hoven, MD.
A permanent solution would eliminate 11th hour fixes to block reimbursement cuts - a frequent occurence. Congress has repeatedly prevented Medicare reimbursement rate cuts from taking effect by issuing temporary solutions. Doctors face a 25 percent cut in payments in January when the latest band aid expires.
The dilemma is finding the federal dollars to pay for H.R. 2810. It will require continued bipartisanship to carve out the money to pay for a permanent SGR fix, which will likely become part of the looming heated federal spending and budget battles. Under pay-as-you-go procedures, lawmakers must offset new spending with cuts.
The cost to repeal and replace SGR has escalated. Earlier in the year, the Congressional Budget Office estimated the cost at about $138 billion. But H.R. 2810 adds more incentives to move physicians from fee-for-service to value-based models.
The CBO recently said that H.R. 2810 would cost about $175.5 billion from 2014 to 2023.
The new system would roll out in phases. First, Medicare would increase payments 0.5 percent annually from 2014 through 2018, costing $63.5 billion, as providers transition to reporting of quality measures.
In 2019, physicians practicing in fee-for-service would receive an additional 1 percent bonus based on performing quality measures and clinical practice improvements through an updated incentive program (UIP). The payments of low-performing physicians would be decreased 1 percent. Providers not submitting quality data would face a 5 percent decrease.
Or physicians could choose to be paid for their Medicare services under an alternative payment model (APM) that would be tested to assure that it would reduce Medicare spending or improve quality of care.
The CBO assumes that providers will likely choose to participate in models that will increase their Medicare payments, such as shared savings programs, when their practice approach results in lower-than-average Medicare spending per patient.
CBO estimates the cost from 2019 to 2013, with the new delivery and payment methods under way, at $112 billion.
CBO said a review has found that few previous Medicare demonstration projects reduced spending, which led to the establishment of the Center for Medicare & Medicaid Innovation (CMMI) to identify new models of care and payment, such as accountable care organizations. Unlike past Medicare demonstrations, CMMI has the authority to pull the plug on unsuccessful model pilots and expand the innovations that work. H.R. 2810 would follow the same structure as CMMI in many ways, CBO said.