With SGR repeal, Medicare refocuses on value
It’s value over volume for Medicare now that the Medicare Access and CHIP Reauthorization Act of 2015 is law.
“This shift in what the country faces in a disease burden really aligns and is helped and facilitated by this updating Medicare to this new disease environment,” Dr. James Madara, CEO of the American Medical Association, said April 15, the day after the Senate passed H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).
“There are a lot of evolving issues to take care of in this migration toward models of payment delivery that work positively toward impacting quality of care,” Dr. Madara said. “Any time a complex bill as helpful as this one is passed, there are implementation problems that sometimes arise, so one of the areas that we will be strongly attentive to at the AMA is keeping our finger on the pulse of the implementation and working with the federal government to make sure that this tracks in a correct way.”
President Obama signed the bill into law on April 16.
The new law repeals the Medicare Sustainable Growth Rate formula, negating the 21% physician fee cut that was to go into effect April 1. In its place, the law provides a 0.5% pay increase yearly for 5 years as the Medicare program makes the transition away from fee-for-service and to value-based payment.
To help get to a point of value over volume, the bill consolidates existing quality programs – including those regarding the meaningful use of electronic health records – into a single value-based performance program.
“We studied that, along with some of the other physician organizations and our House of Delegates, and the conclusion was that this was not just an improvement, but a significant improvement, over the current set of measurements,” Dr. Madara said.
The new law also incentivizes physicians to use alternate payment models that focus on care coordination and preventive care with a 5% payment bonus. It pushes for more transparency of Medicare data for physicians, providers, and patients.
MACRA also includes funding to help smaller practices participate in alternative payment models or the streamlined quality measurement program, as well as funding to help in the development of quality measures.
“The provisions that allow for continued funding of the quality measurement enterprise in H.R. 2 are a key building block of this important transition and will also facilitate work to continue advancing measurement science,” the National Quality Forum said in a statement. “Ultimately, these efforts will not only help people get better healthcare, but also will reduce costs that strain patients, purchasers, and the system overall.”
Other important provisions in the new law include the reauthorization of several key programs. CHIP (the Children’s Health Insurance Program), the Community Health Center program, the National Health Service Corps, and the Teaching Health Centers program were all reauthorized for 2 years; they had been scheduled to expire later this year. Additionally, the law continues a partial delay of the Medicare two-midnights ruleuntil Sept. 30.
Physicians also cheered provisions of the new law that allay malpractice concerns. The law specifies that the development, recognition, or implementation of any federal health care guideline or standard does not establish a duty of care in medical malpractice claims.
The provision helps distinguish government quality guidelines and payment rules from medical liability standards, according to Brian K. Atchinson, president and CEO of PIAA, a national trade association for medical malpractice liability insurers.
“None of these rules or guidelines were created with the intent to establish a legal standard for negligence, and so it makes sense for Congress to clarify that fact,” Mr. Atchinson said in an interview. “The standard of care provision in the SGR fix bill does just that, and nothing more. It does not shift the playing field to either plaintiffs or defendants. Instead, it ensures that these federal rules are not misused for purposes for which they were never intended.”
H.R. 2 ran into some trouble in the Senate because it does not have a dedicated funding mechanism to cover its full cost. The Congressional Budget Office estimated that enactment of the law will increase the deficit by $141 billion over 10 years. The CBO’s score also found that the legislation would save money, compared with the price of continued patches.
A total of $73 billion of the $214 billion cost of package is offset through spending reductions and revenue increases included in the bill, the CBO found. These include income-related premium adjustments for Medicare Parts B and D, Medigap reforms, an increase of levy authority on payments to Medicare providers with delinquent tax debt, adjustments to inpatient hospital payment rates, a delay of Medicaid Disproportionate Share Hospital changes until 2018, and a 1% market basket update for postacute care providers.
