Medicare's Sustainable Growth Rate--(SGR)

As reported in iHealthbeat, a publication of the California Health Care Foundation (CHCF)

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.

SGR Replacement Bill Has Big  Implications for Health IT 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: Sunset meaningful use penalties (Gold et al., "Morning eHealth," Politico, 3/20); Make eligible professionals who meet the program criteria eligible for a bonus (Modern Healthcare, 3/19); Require eligible professionals to demonstrate that they have not "knowingly and willfully taken action ... to limit or restrict the compatibility or interoperability of the certified EHR technology"; and Encourage medical professionals to use EHRs even if they are not eligible for the meaningful use program via incentives, such as streamlined reporting of quality metrics (Goedert, Health Data Management, 3/20). 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: Clarify that Medicare is able to pay for telehealth services in alternative payment models ("Morning eHealth," Politico, 3/20); and Incentivize telehealth services and remote patient monitoring by including them as clinical practice improvement activities (Modern Healthcare, 3/19). In addition, the legislation would call for several reports, including: A study by HHS on ways to potentially assist providers with comparing EHR systems, which would be due in one year ("Morning eHealth," Politico, 3/20); and A study by the comptroller general assessing how insurers are encouraging remote patient monitoring and the obstacles to more widespread use of remote monitoring technology in Medicare (Modern Healthcare, 3/19). 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.