Physician Payment Reform In A Post-SGR World: Challenges Remain

On April 16, 2015 President Barack Obama signed the Medicare Access and CHIP Reauthorization Act (MACRA) which, among other things, finally repeals the Sustainable Growth Rate (SGR) mechanism of updating fees to the Physician Fee Schedule (PFS). The SGR had been blamed for causing instability and uncertainty among physicians for over a decade and led to 17 overrides of scheduled fee cuts, at a cost well in excess of $150 billion.

The passage of MACRA, however, raises new questions about where the U.S. health care system is headed in the post-SGR world of payment and delivery reform. In addition to the changes in MACRA, the Patient Protection and Affordable Care Act (ACA) included numerous policy changes relating to the delivery of care.

Moreover, on January 26, even before the fate of MACRA was known, Department of Health and Human Services (HHS) Secretary Sylvia M. Burwell announced a major initiative calling for 30 percent of Medicare payments to be value-based through the use of alternative payment models (APMs) by 2016, and 50 percent of payments by 2018. In addition, HHS also set a goal of tying 85 percent of all traditional Medicare payments to quality or value by 2016 and 90 percent by 2018.