On the cusp of a new physician payment formula…maybe

BALTIMORE—It’s so close, Rob Blaser can almost taste it.

Blaser, the director of Public Policy for the Renal Physicians Association since 2003, has been here before. Fixing the much maligned sustainable growth rate, the formula used by Medicare to set physician payments, looked like a completed deal last year. But changing to a pay-for-performance based formula to reimburse nephrologists and other physicians for providing patient care is not easy to get your regulatory arms around.

Things are different this year for the 1997-born SGR, Blaser said in his review of policy and politics during the RPA’s annual meeting here.

New House Ways and Means chair Paul Ryan essentially adopted last year’s bill, which was supported by physician groups.
Many House Republicans are softening on the need for a completely paid-for bill (an estimated $70 billion of the $150-$175 billion cost is accounted for based on changes in payment levels for health care providers and beneficiaries).
House Speaker John Boehner and Minority Leader Nancy Pelosi have publically shown support for the bill and were integral in bringing the legislation to the House floor.

The new payment model, which would transition over the first five years, is designed to reward physicians based on the quality of care provided, rather than the quantity of procedures performed. It would encourage better care coordination and chronic care management, ideas that experts have said are needed in the Medicare program. It would give a 5% payment bonus to providers who receive a “significant portion” of their revenue from an “alternative payment model” or patient-centered medical home. It would also allow broader use of Medicare data for “transparency and quality improvement” purposes.

“The SGR has generated repeated crises for nearly two decades,” Energy and Commerce Committee Chairman Fred Upton, R-Mich., one of the new bill’s drafters, said in a statement. “We have a historic opportunity to finally move to a system that promotes quality over quantity and begins the important work of addressing Medicare’s structural issues.”

The package also includes an additional $7.2 billion for community health centers over the next two years; funding for therapy services, ambulance services and rural hospitals, as well as continuing a program that allows low-income people to keep their Medicaid coverage as they transition into employment and earn more money. The deal also would permanently extend the Qualifying Individual, or QI program, which helps low-income seniors pay their Medicare premiums.

The clock is ticking…

Legislation to repeal the SGR is expected to move in the House this week, but members are scheduled to begin a two-week recess March 27. Senate Democrats and Republicans may want to offer amendments to the emerging House package, which could mean that the chamber does not resolve the SGR issue before the Senate’s two-week break, which is scheduled to begin March 30.

If the SGR issue can’t be resolved by March 31, Congress could pass a temporary patch as negotiations continue or ask the Centers for Medicare and Medicaid Services, which oversees Medicare, to hold the claims in order to avoid physicians seeing their payments cut 21%. -by Mark Neumann