It has been over 15 years since Congress enacted the SGR, an act which has been put on hold each year since t hen. The accumulative value is now over 20%, which if enacted would reduce Medicare payments to providers by 20%.
Each year health providers have lobbied Congress to keep the SGR on hold.
Since 1994 many changes have occured in the administration of CMS and payment reforms. As Congress considers repealing the SGR other changes have occured, the Affordable Care Act and other changes in payment models from fee for service payment to value based payments.
On Thursday, Senate and House lawmakers introduced bipartisan, bicameral legislation (HR 1470) to permanently replace Medicare's sustainable growth rate formula that includes several health IT provisions, Modern Healthcare reports (Tahir, Modern Healthcare, 3/19).
Congress last year approved a short-term delay to scheduled reductions to Medicare physician reimbursement rates called for by the SGR. Providers face about a 21% reduction in Medicare reimbursement rates unless Congress acts by April 1, 2015 (Hughes, Wall Street Journal, 3/19).
Meaningful Use Provisions
The new legislation would replace the SGR with a merit-based incentive payment system that would consolidate several federal incentive programs, including the meaningful use program, physician quality reporting system and value-based modifiers, into one value-based payment reporting system.
Under the 2009 economic stimulus package, providers who demonstrate meaningful use of certified electronic health records can qualify for Medicaid and Medicare incentive payments.
Specifically, the SGR replacement measure would:
The legislation also would mandate that HHS work with stakeholders to develop measures to quantify interoperability by July 2016 ("Morning eHealth," Politico, 3/20).
Additional Health IT Provisions
The bill also would:
In addition, the legislation would call for several reports, including:
The replacement legislation does not mention the ICD-10 transition.
It seems that the simplicity of repealing the SGR has bcome obfuscated by all of the ramifications of the Affordable Care Act, transitioning to a value-based payment model, HIT incentives, the patient quality reporting sysem (PQRS).
The bottom line is that savings afforded by the Affordable Care Act combines with incentives may equal or outweigh the theoretical reductions of the SGR, rendering the SGR irrelevant.