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Medigram Alert: US Senate passes historic measure to repeal SGR

(April 15, 2015)

The U.S. Senate made history last night when its members voted overwhelmingly in support of H.R. 2, the “Medicare Access and CHIP Reauthorization Act” (MACRA), which repeals Medicare’s flawed sustainable growth rate (SGR) formula.

The bill, which passed 92-8 and had strong bipartisan support as well as the support of hundreds of medical groups, prevents a 21 percent cut to physician Medicare reimbursement and paves the way for health care payment and delivery models that reward value instead of volume. President Obama has said he will sign the bill.

In addition to repealing the SGR formula, H.R. 2 also:

  • Establishes a new 5 percent incentive for participating in alternative payment models like accountable care organizations or medical homes.
  • Creates a new value-based incentive payment system—the Merit-Based Incentive Payment System—that would streamline and harmonize all of the current value incentives such as Meaningful Use (MU), Physician Quality Reporting System (PQRS) and Value Modifier (VM).
  • Extends the Children’s Health Insurance Program, as well as funding for community health centers and the National Health Service Corps.
  • Extends the Geographic Practice Cost Index (GPCI) work floor until Jan. 1, 2018.

“This is something the Society and literally hundreds of other medical groups, including the American Medical Association, have worked toward tirelessly for more than a decade. Now we can look forward to moving toward a system that promotes high-quality care while reducing costs—without the annual threat of payment cuts,” said Society President Richard A. Dart, MD. “Wisconsin physicians are well positioned to take advantage of this new stability and the payment and delivery models included in the bill.”

H.R. 2 freezes Medicare rates at current levels through June, then raises them 0.5 percent in the second half of the year. They will continue to increase 0.5 percent each year through 2019, after which the government will implement new incentives for physicians to adopt alternative payment models.

The legislation also includes a provision the Society has championed for three years that will amend the Qualified Entity (QE) statute, allowing for broader sharing of Medicare data. Specifically, this provision will provide flexibility to QEs in the way that they use and share combined Medicare and private claims data with providers, payers and health care consumers. Through these changes, QEs could provide actionable information and targeted analyses to drive positive changes in the health care delivery system.

The U.S. House of Representatives passed H.R. 2 two weeks ago—also by an overwhelming, bipartisan vote.

“We are thrilled that Congress has finally put an end to the annual cycle of kicking the can down the road by adopting patches rather than resolving the root problem. H.R. 2 takes a balanced approach that promotes the long-term sustainability of the Medicare program,” said Molli Rolli, MD, chair of the Society’s Board of Directors. “We are very grateful to our own Senators Tammy Baldwin and Ron Johnson, as well as U.S. Representatives Paul Ryan, Ron Kind, Reid Ribble, Mark Pocan, Sean Duffy and Gwen Moore, who all supported this landmark legislation; and we look forward to the positive changes we believe will result from their action.”

More information about H.R. 2 is included in the March 26 issue of Medigram.

In addition, Chris Rasch, the Society’s director of state and federal relations will present Overview of SGR Repeal and New Legislation, a webinar at noon on May 1. Registration is free to Society members. Click here to learn more.