SGR Fix to Simplify Quality Reporting, Value-Based Payments

In an annual battle that has flared up every spring since 1997, Congress is once again considering the repeal and replacement of the Medicare sustainable growth rate (SGR), and this year’s potential legislation has significant impacts on CMS quality reporting programs and value-based payments.

While this year’s version of the bill is unlikely to contain another surprise ICD-10 delay, legislation to permanently repeal the SGR has been deflected time and again, leaving healthcare stakeholders frustrated by the uncertainty and instability of the nation’s largest reimbursement system.

The latest temporary patch expires on March 31, 2015, giving lawmakers just a few more days to decide on an acceptable alternative to the flawed and failed payment metric.

In addition to preventing a 21 percent cut to Medicare reimbursements, the bi-partisan, bi-cameral bill currently under consideration would consolidate the three major quality reporting programs – the EHR Incentive Programs, the Physician Quality Reporting System (PQRS) and the Value-Based Modifier (VBM) into a single system that reduces conflicts and streamlines the reporting process.

Key features of the legislation under consideration would enact the following:

• Replace the SGR formula and remove the threat of payment cuts totaling more than 20 percent of Medicare reimbursements.  The law would also implement annual payment increases of .5 percent for the next five years.

• Incentivize the shift to alternative, value-based payment models by providing a 5 percent bonus to providers accruing significant reimbursements within the patient-centered medical home (PCMH) model or another alternative value-based payment model (APM).  To receive the bonus, providers will need to receive at least a quarter of their Medicare revenue through APM participation between 2018 and 2019, with the thresholds increasing over time.

• Develop clinically-driven quality care guidelines to measure successful participation in quality-based reimbursement programs and create a technical advisory committee to monitor the progress and success of physician-developed APMs.