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SGR Ritual Ends

After years of lobbying, the Chicago Medical Society and other advocacy groups, have cause to rejoice. Ending an annual and, many believe, fake crisis, full of threats and scaremongering, Congress approved and President Obama signed legislation repealing the SGR funding formula.

Multiple organizations brought vast resources—time, money, congressional visits, and physician outreach—to achieve this seeming milestone. Your CMS walked a fine line, keeping members abreast of legislative developments, urging them to contact their lawmakers, while taking care not to add to the SGR fatigue many physicians feel. We were cautious in last month’s magazine issue, not wanting to assume Congress would put an end to the annual cliffhanger.

As we celebrate the SGR’s demise, it’s also good time to reflect on what the repeal portends.

We’ve heard a number of explanations for Congress’ reaching this milestone. The conventional wisdom is that the 17 pay patches, and even the permanent SGR fix, are all budget gimmickry. Also, in recent years, the Congressional Budget Office came out with lower repeal cost estimates, making a fix more palatable. Meanwhile, with fee-for-service considered unsustainable and the health care landscape changing dramatically, the cost of doing nothing is more prohibitive than a fix. Finally, it’s increasingly clear that the SGR is a distraction, diverting attention and resources from efforts to improve payment delivery through the development of new models.

Yet SGR repeal is a double-edged sword, ending one era and ushering in the transition to a “value-based” system. Some observers predict Congress will use the repeal as a tool to prod doctors into the value-based system. They point out that Congress didn’t have to fix the SGR.

The Medicare Access and CHIP Reauthorization Act provides positive annual payment updates of 0.5% starting July 1 and through 2019. Claims that were held for the first half of April will be processed and paid at the rates that were in place before the 21% cut was scheduled to take effect.

To accelerate the shift to value-based payment, something known as a merit-based incentive payment system (MIPS) will be established beginning in 2019. Medicare’s current quality reporting programs will be streamlined and simplified into the MIPS.

While the legislation supports physicians who choose to adopt new payment and delivery models, it also retains Medicare’s fee-for-service model. Participation in new models is entirely voluntary. Incentive payments will be available for physicians who participate in these alternative payment models and meet certain thresholds.

Those who receive a substantial portion of their revenues through these models may earn a 5% bonus from 2019 through 2024. Providers who choose to participate in the MIPS will be subject to positive or negative payment adjustments based on their performance.

Simply put, the law opens the door to broader use of new alternative ways of paying physicians.

Last of all, the legislation includes protections so that medical liability suits cannot use Medicare quality program standards and measures as a standard or duty of care.

The Chicago Medical Society will be actively involved at each stage, shaping policies and representing you, our members. Please join us in meeting the future.

Kenneth G. Busch, MD
President, Chicago Medical Society

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