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 signs the Medicare Access and CHIP Reauthorization Act on April 16, 2015.

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.

Enactment of the law also looked a bit shaky when the Office of the Actuary for the Centers for Medicare & Medicaid Services released a report April 9 that suggested physicians would see future payment cuts under the law.

“Physician payment rates under H.R. 2 would be lower than scheduled under the current SGR formula by 2048 and would continue to worsen thereafter,” according to the report. “Absent a change in the method or level of update by subsequent legislation, we expect access to Medicare-participating physicians to become a significant issue in the long term under H.R. 2.”

However, the AMA’s Dr. Madara said that he was not concerned about the projections because the report assumes no changes in coming years. “One does not make linear trajectories over a periods of decades or more and assume that that’s where we are going to end up because that assumption is that nothing happens in the interim and, as we all know, that’s just simply not the way life works,” he said.

AMA President Robert Wah noted that the report “fails to take into account the long-range impact such a drastic payment cut [due to the SGR] would have on quality and access for Medicare beneficiaries, or the many options H.R. 2 will make available to physicians for avoiding onerous penalties under current law and the significant positive updates that high performers can earn.”

The American College of Physicians applauded the Senate action.

“We all witnessed something quite extraordinary and historic today when the Senate followed the House in passing comprehensive legislation to repeal Medicare’s Sustainable Growth Rate formula (H.R. 2) and transition us to a new value-based system,” ACP President David Flemming said in a statement.

American Society of Clinical Oncology President Peter Paul Yu said in a statement that “Medicare beneficiaries and their physicians can breathe easier knowing they will no longer face the perennial threat of payment cuts that risk disruption of care and cause anxiety among patients. ... [ASCO] looks forward to working with policymakers to ensure that this new law is effectively implemented and paves the way to new payment models that foster high-quality, value-based health care for all Americans with cancer.”

Similarly, the American Society for Radiation Oncology praised the effort. “Permanently repealing the SGR and replacing it with a stabilized reimbursement plan focused on quality will strengthen Medicare and allow us to enhance cancer care for the more than one million patients treated with radiation therapy each year,” Dr. Bruce G. Haffty, chair of ASTRO’s board of directors, said in a statement.

American College of Cardiology President Kim Allan Williams Sr., in a statement applauding the actions of the Senate, noted that the members “accomplished a major feat by passing legislation that ends a cycle of delays and patches in the law, which created uncertainty for Medicare patients and clinicians for more than an decade.”

The American College of Surgeons lauded the Senate action.

“The reforms set in place by Tuesday’s historic Senate passage of H.R. 2 offers peace of mind to America’s seniors, whose access to medical care through the Medicare program has been threatened for more than 10 years,” Dr. David B. Hoyt, executive director of the American College of Surgeons, said in a statement. “The College is committed to working with policymakers to further develop policies authorized in the legislation that stress quality of care for Medicare beneficiaries.”

The American Psychiatric Association praised the work of the Senate to pass the bill. “The Senate passage of the SGR reform bill is a major step toward a reliable and rational payment system for Medicare beneficiaries and their physicians,” APA President Paul Summergrad said in a statement. “It is long overdue.”

“It is time for a health care system in America that is focused on delivery of quality care, rather than quantity of care,” Dr. John C. Jennings, president of the American Congress of Obstetricians and Gynecologists, said in a statement. “By strengthening the ability of providers to focus on prevention, this bill will help to ensure that more Americans are able to stay healthy, avoiding serious illnesses and their related costs.”

The American College of Emergency Physicians called the move away from the SGR and toward a value-based system “essential to emergency departments. Elderly patients are more likely to need emergency care than any other age group, and the fastest growing segment of the U.S. population is people over 85 years of age. It represents a significant accomplishment for all the emergency physicians who actively made their voices heard in Congress.”

gtwachtman@frontlinemedcom.com

With SGR repeal, Medicare refocuses on value