Bipartisan Proposal to Repeal SGR Plan Likely to be Reintroduced

The Hospitalist. 2013 January;2013(01):

January 1, 2013 | The Hospitalist

“The global payment model is an attractive one for hospitalists because we play a key role in managing hospitalized patients efficiently and well, while also encouraging collaboration between inpatient and outpatient providers to avoid duplication of services,” Dr. Doctoroff says. “Some bundled payment models, which tie reimbursement to a defined episode of care, also could be advantageous for hospitalists, who coordinate the patient’s care throughout their entire healthcare episode, from inpatient diagnosis through post-discharge.”

Alternative Fee-for-Service System

For physicians who choose not to adopt one of the new reimbursement models, the bill directs CMS to offer an alternative fee-for-service system with incentives for improved quality and lower cost. This alternative would be available to physicians (including hospitalists) who participate in approved quality-reporting options, including the Physician Quality Reporting System (PQRS) or an approved Maintenance of Certification (MOC) program with quality registries. It also would apply to physicians who fall into the top 25% of CMS’ Value-Based Payment Modifier program (VBPM).

Boosting Primary Care

In addition to expediting the rollout of CMS-endorsed alternate payment models, the Schwartz bill recognizes the importance of primary care as the foundation of an effective healthcare delivery system and redresses its undervaluation with a 2.5% reimbursement update for physicians and other healthcare professionals for whom 60% of their Medicare physician fee schedule allowable charges are from a designated set of primary-care, preventive, and care-coordination codes.

“SHM specifically advocated for the inclusion of primary-care billing codes that hospitalists use,” Dr. Doctoroff says, “including hospital inpatient visits and observational services.”

“Of all the attempts to deal with the SGR over the past several years, Rep. Schwartz’s bill makes the most sense,” Genzink says. “While it doesn’t answer all of the healthcare system’s problems, it encapsulates many of the goals of reform—especially the shift from fee-for-service toward a payment system based on quality and outcomes. It recognizes that no one model will work for all physicians and offers the flexibility of multiple pathways. And it has bipartisan support, which seems to be a rarity these days.”

Chris Guadagnino is a freelance medical writer in Philadelphia.

Specific Components of the Schwartz-Heck Proposal

Repeals the SGR.
Stabilizes payments through 2018 by continuing current Medicare rates through 2013.
Provides positive reimbursement updates of 0.5% to all physicians and redresses the undervaluation of primary care with a positive 2.5% update for designated primary-care, preventive, and coordinated-care services in calendar years 2014-2017, then extends the 2017 rates through 2018.
Requires CMS to evaluate and implement a menu of at least four of the most effective delivery model options with various levels of risk and integration, to ensure maximum participation by physicians in diverse practice settings and geographic regions.
Transitions to the new reimbursement models by January 2019.
Offers an alternative fee-for-service system with new incentives for care coordination, management of high-risk patients, improved quality, and lower cost.
Incentivizes physician adoption of one of the selected new reimbursement models, or the alternative value-based fee-for-service system, by reducing payments in years 2019 through 2022 (with limited exemptions on a case-by-case basis) to physicians who choose not to adopt a new model.
Pays for the cost of SGR repeal with congressionally allocated military spending
that is no longer required because of ceased military operations in Iraq and the winding down of operations in Afghanistan.