Congressional efforts this year have taken on heightened importance for many providers because prospects for a replacement improved after the Congressional Budget Office revised downward an earlier estimate of the cost for scrapping the SGR. The CBO's February estimate chopped $107 billion off its August 2012 estimate of the 10-year cost of eliminating the SGR, which it now expects to cost $138 billion.
Under the payment formula, which was designed to control growth in Medicare's costs, physicians are slated for a 24.4% cut in their Medicare payments beginning Jan. 1, 2014. That looming cut has spurred physicians to focus on proposals to replace the SGR system and their advocacy organizations sent a flurry of responses to the congressional panels with the power to replace it.
A key question that has emerged is how much time physicians would have to move to the new payment system.
Some medical specialty groups have urged a minimum of five years to transition away from Medicare's current system.
For instance, comments from the Alliance of Specialty Medicine submitted June 5 to the Ways and Means Health Subcommittee described a five-year transition as a “critical” element in any physician pay reform proposal.
However, organizations representing other types of providers have backed shorter transitions. The Premier healthcare alliance, which included 2,800 hospitals and health systems, urged no more than a three year transition.
“The Physician Quality Reporting System (PQRS) already provides a huge menu of performance measures from which to choose and a modest period of stability should provide sufficient time to address measure gaps and related issues,” Blair Childs, senior vice president at Premier, wrote the House panel on June 10. “Providing a longer period would unnecessarily delay movement to an improved payment update methodology, one based on physician performance.”
The transition period remains unsettled among members of Congress leading the SGR replacement push, said Julius Hobson, a former lobbyist for the American Medical Association and now an adviser for the Polsinelli law firm. The longer period would allow more time to collect and analyze physician performance data to determine payments under a new system, while a shorter transition would accelerate cost savings.
Interestingly, the AMA backed a three- to five-year transition period. However, a June 10 letter James Madera, CEO of the AMA, wrote to the House Energy and Commerce Committee emphasized the many complex steps that would be needed to be completed in that timeframe.
Another flashpoint that has emerged is over which providers should help determine the quality metrics used to measure physician performance under the new system. The Alliance questioned the involvement of “other relevant stakeholders.”
“While multi-disciplinary input is important, it is critical that this process be driven only by clinicians with relevant clinical and topical knowledge,” the group wrote.
Chip Kahn, president and CEO of the Federation of American Hospitals, countered in a June 10 letter to the House committees that the consistency of measurements across providers and settings would be jeopardized without measures backed by a “multi-stakeholder process,” such as the National Qualify Forum.
“All stakeholders should have the opportunity to review any quality measure for its scientific validity, feasibility, reliability and importance,” Kahn wrote.
Hobson said it is not surprising hospitals would want a key role in the process due to their accelerating purchases of physician practices in recent years.
At least one provider group also dove into what will likely be the largest area of conflict in the entire SGR replacement process: money. Congressional leaders of the SGR reform effort have consciously chosen to put off any discussion of ways to fund it until the less controversial elements of SGR replacement are settled. But that didn't stop the head of the Association of American Medical Colleges from threatening to oppose any bill funded with cuts to their members.
“The AAMC cannot support any new payment system that is financed by redirecting funds currently supporting critical health care expenditures, particularly cuts that would disproportionately impact the nation's teaching hospitals and teaching physicians,” Dr. Darrell Kirch, president and CEO of AAMC, wrote to the House panels on June 10.
The move surprised Hobson who noted that “it is awfully early in the process to start drawing red lines—especially red lines you may have to cross later on.”
Also arguing against proposals to fund SGR changes with cuts to other providers was the AMA, which opposed “value-based” bonus payments coming from cuts to other physicians. Instead AMA's Madara urged Congress to find new funding for such bonus payments.
“These payments should reflect potential savings to the Medicare program as a whole from decreased hospital admissions, readmissions, and emergency department visits resulting from up-front physician care,” Madara wrote.
Follow Rich Daly on Twitter: @MHrdaly
