PCPCC Supports SGR Repeal and Medicare Provider Payment Modernization Act

Statement Attributable to:

Marci Nielsen, PhD, MPH
Chief Executive Officer, Patient Centered Primary Care Collaborative

The PCPCC commends the Members of the Senate Finance, House Ways and Means and Energy and Commerce Committees on their agreement to repeal the Sustainable Growth Rate (SGR) -- the 1997 formula used to set Medicare reimbursements for physicians and other healthcare providers -- and replace it with a reimbursement model that moves the US health care delivery system away from the current volume-based payment system to one that rewards quality, efficiency, and innovation.  The PCPCC strongly supports the bipartisan, bicameral efforts of the “SGR Repeal and Medicare Provider Payment Modernization Act of 2014” and is particularly pleased with the agreement’s recognition of the patient-centered medical home (PCMH) as an alternative payment model. The PCPCC commends the agreement for including the following elements:

• Repeals the flawed SGR and replaces it with a reimbursement system focused on quality, value, and accountability.
• Improves the existing fee-for-service system by including a focus on rewarding value over volume and ensuring payment accuracy.
• Incentivizes physicians to move toward alternative payment models (APMs).
• Provides a 5 percent bonus to providers who receive a significant portion of their revenue from an APM or patient-centered medical home (PCMH).
• Establishes a Technical Advisory Committee (TAC) to review and recommend physician-developed APMs based on criteria developed through an open comment process.
• Consolidates the three existing quality programs (Physician Quality Reporting System, Value-Based Payment Modifier, and meaningful use of electronic health records) into a streamlined and improved quality measurement program that rewards providers who meet performance thresholds, improves care for seniors, and provides certainty for providers.
• Incentivizes care coordination efforts for patients with chronic care needs.
• Introduces physician-developed clinical care guidelines to reduce inappropriate care that can harm patients and results in wasteful spending.
• Requires development of quality measures and ensures close collaboration with physicians and other stakeholders regarding the measures used in the performance program.

As outlined in our recent report The Patient-Centered Medical Home’s Impact on Cost & Quality: An Annual Update of the Evidence, 2012-2013, using the PCMH as a supportive framework for alternative value-based payment models makes economic sense.  Our review of recent academic and industry studies demonstrates impressive improvements across a broad range of categories including: cost, utilization, population health, prevention, access to care, and patient satisfaction when primary care practices have embraced the PCMH model of care.

The PCPCC supports swift action on ”The SGR Repeal and Medicare Provider Payment Modernization Act of 2014” and encourages the Committees to continue working together in a bipartisan and bicameral fashion to identify and offsets and pass this landmark legislation into law.

A summary of the agreement and legislation can be found here.