One way to replace the flawed sustainable growth rate (SGR) formula for setting Medicare physician rates would be an enhanced fee-for-service system that allows practitioners to opt out and participate in alternative payment models.
The proposal is part of the advanced framework for legislation to change how Medicare pays physicians, which House Energy and Commerce Committee Republicans released June 28. They plan to begin committee work on the bill later this month.
The legislative framework calls for authorization of a CMS contractor to evaluate various physician payment models through demonstration programs and report on those that work best.
In the fee-for-service program, providers would get payment updates and incentives based on how they met specified quality measurements. Providers newly participating in the payment incentive system would get payment updates for the first calendar year and possibly beyond, so they would have time to adjust.
The evaluation period would last no more than three years. Once an evaluation was complete, the contractor would submit a report on each model with recommendations on whether it should become an eligible alternative payment system.
The framework also calls for giving providers feedback on their performance in meeting the measures “as real time as possible, but at least quarterly.” It also establishes a Web-based provider portal through which providers could access performance data. But it doesn’t offer any clues about how the committee Republicans would pay the budgetary cost of replacing the SGR formula, now estimated by the Congressional Budget Office to be $139 billion over 10 years.
“We’d like to deal with the SGR problem once and for all rather than kick the can down the road as we have done in previous years, and there seems to be bipartisan consensus to do that,” said Energy and Commerce Health Subcommittee Chairman Joe Pitts. The Pennsylvania Republican intends to convene an initial markup session later this month, the newsletter CQ HealthBeat reported.
Pitts also noted that committee Republicans had been discussing the proposal with the Senate and working closely with lawmakers on the House Ways and Means Committee.
Previous proposals on replacing the payment system earlier this year came from both committees, but Energy and Commerce has produced the two latest. Ways and Means has direct jurisdiction over a number of potential payment offsets.