“We urge you to include a full repeal of the SGR, to stabilize current payment rates to ensure beneficiary access in the near term, and set out a clear path toward comprehensive payment reform,” wrote the members of Congress, led by Rep. Allyson Schwartz (D-Pa.), to the supercommittee.
That congressional missive followed weeks of similar letters to the panel from provider advocates, including one the week before from the American Academy of Family Physicians, which also launched a national grass-roots campaign to push for that.
But a common denominator in the appeals from members of Congress and from many provider groups was the lack of broadly supported ways the deficit group could offset the costly repeal. The offsets are critical because undertaking the $300 billion, 10-year repeal of the SGR would complicate the supercommittee's difficult task by effectively increasing the total savings the panel would need to find.
Last week, the debt panel was handed a detailed way to pay for that costly change.
Ten years after first calling for Congress to repeal the SGR, the Medicare Payment Advisory Commission approved on Oct. 6 a first-time comprehensive list of offsets from within Medicare to cover the cost of doing that. Unfortunately for MedPAC, the cuts are opposed by every provider group that has taken a public position on it.
The proposal, approved 15-2, includes a physician component—to reduce the 10-year SGR cost by about $100 billion—that would freeze Medicare rates for most primary-care physician services while cutting other physician services by 5.9% for three years and then freezing those rates for seven. The nonphysician savings in the SGR replacement plan—worth about $220 billion in 10-year savings—include 34% from drugmakers, 15% from beneficiaries, 11% from hospitals and 6% from durable medical equipment cuts.
Although many of the members of the commission were leery of the cuts they proposed, they portrayed the specific offsets as part of their fiduciary duty to Congress and a way to spur congressional action on repealing and replacing the Medicare physician payment formula. Several members said they hoped legislators ultimately would fund such changes through means outside of MedPAC's purview, such as through malpractice reform.
“Maybe this will have untoward consequences, this novel approach, but the spirit in which it has been done is to try to put ourselves in the position of Congress,” Glenn Hackbarth, chairman of MedPAC, said before the vote.
Those unintended consequences drew strong opposition from two physician MedPAC members and from physician advocates, who warned the offsets would lead more physicians to drop out of Medicare; beneficiaries to lose access to care; and undermine the movement toward paying for quality instead of quantity of care.
“Primary-care physicians and subspecialists that are interested in transforming their practices to provide more comprehensive and coordinated care won't have the resources in order to do that, to participate” in ACOs and other models, Shari Erickson, director of regulatory affairs at the American College of Physicians, told MedPAC after its vote.
MedPAC will send the list of proposed SGR repeal offsets this week to the congressional committees with oversight of Medicare, Hackbarth said in an interview, and it is up to them to decide whether Congress as a whole should act on it or forward it to the supercommittee for consideration. But timing of the first-time recommendations was not designed to coincide with the work of the debt panel, he said.
The supercommittee is expected to use such existing cost-savings proposals in its final package, according to numerous congressional sources interviewed in recent weeks, primarily because such options already have established savings attributed to them.
But providers and their advocates already were maneuvering late last week to remove the MedPAC offsets as a viable option, even as they continued to push for SGR repeal.
“If I were on the supercommittee, I would be looking for ideas that were vetted and had bipartisan support,” Michael Regier, general counsel for VHA, told Modern Healthcare after the MedPAC vote.
What ideas would meet those criteria remain unclear, as two leading hospital-backed offsets—raising Medicare's eligibility age and medical liability reform—face sharp partisan divisions.
Schwartz agreed in an interview that the MedPAC recommendations are “too severe to providers.”
She plans to introduce legislation later this year to specify a way to pay for permanent repeal of the SGR but, for now, she and many provider groups lack any popular alternatives to pay for it.