Plan to Scrap SGR Moves Ahead

Medical Practice Financial SuccessBipartisan leadership of three Senate and House committees want to revamp how Medicare pays physicians, and they’ve introduced legislation to do just that.
The proposed legislation would repeal the 1997 budget cap calculation called the Sustainable Growth Rate (SGR) and replace it with a .5 percent increase for each of the next five years as Medicare transitions to an alternate payment model. According to a fact sheet from the three committees, the transition will lead to an alternative payment model (APM) that would include the following:

  • Participants who receive a significant portion of their revenue from an APM or patient-centered medical home (PCMH) 5 percent bonus.
  • Participants need to receive at least 25 percent of their Medicare revenue through APM in 2018-19, with incentive increasing over time. The policy provides incentive to participate in private payer APMs.
  • A new Technical Advisory Committee (TAC) will review and recommend physician-developed APMs based on criteria developed via open comment.

The new system also promises to consolidate three existing quality programs into one, implement a process to improve payment accuracy for individual provider services, focused on care coordination efforts for patients with chronic care needs, introduces physician-developed clinical care guidelines, and requires development of quality measures with stakeholders.
Long reviled for draconian cuts and last-minute fixes by Congress that totaled $150 billion in short-term patches, the SGR’s latest postponement lasts only until March 31st.
Senate Finance Committee Max Baucus hopes to have a deal wrapped up before his departure to China, where he will soon serve as ambassador.

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Brad Ericson
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Brad Ericson, MPC, CPC, COSC, is a seasoned healthcare writer and editor. He directed publishing at AAPC for nearly 12 years and worked at Ingenix for 13 years and Aetna Health Plans prior to that. He has been writing and publishing about healthcare since 1979. He received his Bachelor's in Journalism from Idaho State University and his Master's of Professional Communication degree from Westminster College of Salt Lake City.

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