MedPAC: Toss SGR and Replace with Freeze
The Medicare Payment Advisory Commission’s (MedPAC’s) report to Congress regarding Medicare’s fee-for-service payment system is clear: Replace the sustainable growth rate (SGR) with specified updates not including an expenditure-control formula.
MedPAC said the SGR should be replaced with a 10-year series of statutory fee schedule updates comprised of a freeze for primary care and three-year, 5.9 percent reductions for other specialties, followed by a freeze. The group also asked the secretary of the U.S. Department of Health & Human Services (HHS) to collect data to establish more accurate work and practice expense values. Overpriced fee schedule services should be identified, MedPAC’s report says, and HHS should reduce relative value units (RVUs) accordingly, using the data gathered.
Under the 10-year update path specified in the report, Congress should direct the secretary to increase the shared savings opportunity for physicians and health professionals who join or lead two-sided risk accountable care organizations (ACOs). The secretary should compute spending benchmarks for these ACOs using 2011 fee schedule rates, MedPAC recommends.