Senate Finance Committee votes to repeal Medicare SGR formula

The US Senate Finance Committee has approved a draft bill to repeal Medicare’s Sustained Growth Rate (SGR) formula for physician payments.

Similar legislation is being considered by the US House Ways and Means Committee. The draft bills include recent revisions to the SGR formula that the American Medical Association considers “a significant improvement over current law … [that] will result in a stronger Medicare program for both patients and physicians.”

Both versions of the proposal would, according to the AMA, consolidate and restructure existing quality improvement incentive programs - including meaningful use of electronic health records, the Physician Quality Reporting System and the value-based modifier - to reduce the administrative and financial burden on physicians.

Healio.com live blogged the Senate Finance Committee’s executive session, which is excerpted here.

10:15 a.m. — Senate Finance Committee executive session is called to order by Chairman Max Baucus (D-Mont.) “Enough is enough for Band-Aid solutions. It is time to act. Finally, not a 1-year patch (committee members cheer). Our bill reflects input from the entire medical community. We all share the same goal.”

10:23 a.m. — Sen. Orrin Hatch (R-Utah): “This legislation represents almost a year of hard work on both sides of the aisle. Since 2001, we’ve had to patch the SGR 15 times. A number of these (medical) associations have already expressed their support for the legislation. It is essential that we accomplish this first step today.”

10:42 a.m. — Sen. Maria Cantwell (D-Wash.): “We need to promote certainty and stability for Medicare providers and patients. I need to make sure innovation is preserved. We need to make sure we’re getting off of fee-for-service models … we want to keep moving forward … to keep innovators on a forward march.”

10:49 a.m. — Sen. Ron Wyden (D-Ore.): “Chronic disease, this is what Medicare is going to be all about. This is responsible for 80%-plus of spending.”

12:15: p.m. — Sen. Pat Roberts (R-Kan.): “Medication therapy management has been shown to be an incredibly successful program … for chronic conditions. It improves quality and saves the system money. Our amendment would expand this to individuals with a single chronic condition.”

12:58 p.m. — Sen. Michael F. Bennet (D-Colo.): “Many of us come from states that are finding ways to innovate across the private and public sectors. Outside of Washington, reasonable people can come to reasonable bipartisan solutions. We ought to be open to ways that not everything needs to be run from Washington, D.C.”

1:44 p.m. — Sen. Michael D. Enzi: (R-Wyo.): “More media reports show that physicians are selling their practices … Medicare is the largest single purchaser of health care in this country. Many CMS rules and regulations are changed after the stock market closes. We need to understand how Medicare payment policies will affect [this issue].”

1:47 p.m. — Sen. Chuck Grassley (R-Iowa): “We should fight to preserve every dollar going into rural areas. It’s no secret that the House wants to cut rural policies even further. We need to speak strongly in favor of rural providers right now. The Ways and Means Committee just added 3 years of fee updates to its bill. We should use a proven rural mechanism.”

1:53 p.m. — Sen. John Thune (R-S.D.): “The Medicare program is not keeping up with technology. It can help prevent costly hospital admissions and re-admissions. This amendment would create a pilot program … and is designed to be budget-neutral. I would ask HHS to establish a formal mechanism” … to evaluate these telehealth programs.

2:25 p.m. — Sen. Michael F. Bennet (D-Colo.): “Every year, every American has access to information about their Social Security benefits. This amendment … facilitates a greater understanding of the Medicare program. Most Americans have no idea what they contribute or what they receive in benefits. It is important for people to understand (that on average they receive more in Medicare benefits than they pay in).”

2:55 p.m. — The SGR reform measure passes on a voice vote of Senate Finance Committee members.

Perspective
  • The house of medicine appreciates the bipartisan approach to the Congress trying to hammer this out over the last year when the cost of replacing the SGR is low. However, none of these things really work for us. We do not support the Senate Finance Committee bill. We think the House bills have more possibility but we can’t support those at the present time.

    We’re doing all of this stuff to improve quality and that’s what they’re talking about, changing the reimbursement system. Unfortunately, they’re emphasizing new payment models like accountable care organizations (ACOs) and bundling initiatives. There is no role for ophthalmology in any of these. So, we can’t participate, even if we’d like to. It’s very frustrating but we don’t think it’s fair.

    ACOs and alternate payment models are not working. The best, most sophisticated ACOs are something called the Pioneer. They’ve been out for a year. There were 33 highly integrated plans (some dropped out). The amount of money made was half of 1% and it cost them 2% of the total cost just to operate the ACO. So, even though they might have gotten some money from Medicare, they all lost money. And the quality improvement was only process measures. That’s the most integrated and highly sophisticated ACOs that are failing and they’re going to base SGR reform on alternative payment models?

    The big thing for us is that there is no role for ophthalmologists. Ophthalmologists are not being bought by hospitals. We don’t generate money for them. We’re out there still getting paid fee for service by Medicare. We may see the ACO patients but we’re not going to be considered part of the ACOs because we’re not owned by them. So, we don’t think it’s fair. We can’t support it.

    • William L. Rich III , MD
    • Medical director of health policy, American Academy of Ophthalmology
  • Disclosures: Rich has no relevant financial disclosures.