From the American Academy of Ophthalmology

In a rare show of unity, the U.S. Senate Committee on Finance and U.S. House Committee on Ways and Means this week released a joint bipartisan proposal to reform Medicare physician pay. The proposal would repeal the sustainable growth rate formula currently used to calculate Medicare physician reimbursement and freeze pay through 2023. Although release of the joint proposal is promising, legislative language has not yet been released and lawmakers have not proposed revenue sources to cover the cost of the pay reforms. The Academy believes this could result in lawmakers passing legislation providing a short-term physician pay fix to stop a 24.4 percent cut in Medicare reimbursement scheduled for Jan. 1. Such a move would provide Congress with more time to refine the proposal.

The Proposal

Under the proposal, physicians would have the option to stay in Medicare’s traditional fee-for-service system or move to alternative payment models, such as patient-centered medical homes, accountable care organizations and bundled payments. Physicians would begin receiving positive updates in 2024, with those who participate in an alternative model receiving a 2 percent pay increase each year; providers opting to remain in traditional Medicare would receive an annual 1 percent increase. During the 10-year freeze period, physicians who assume some financial risk by participating in one of the alternative models would receive a 5 percent bonus, starting as early as 2016 through 2021.

Creation of a New Value-Based Performance Program for Physicians Participating in Traditional Medicare

The proposal would combine three Medicare quality programs – the Physician Quality Reporting System, the value-based modifier and the electronic health record incentive program – under a new Value-Based Performance program starting in 2017. Penalties in place under the current programs would remain through 2016 and then be replaced with new penalties in the Value-Based Performance program. Providers would receive either positive or negative payment adjustments based on a composite score of the assessment categories: quality/PQRS, resource use, clinical practice improvement activities and meaningful use of an EHR system. The program is budget neutral, which means payment increases to providers with high performance scores would be offset by payment reductions to poor-performing providers. Providers who treat few Medicare patients or who participate in an alternative payment model would be excluded from the Value-Based Performance program.

Focus on Accuracy in Payments

The U.S. Department of Health and Human Services under the proposal would implement initiatives to increase the accuracy of payments to physicians. This includes increased focus on the review of potentially misvalued codes, with a 1 percent target in savings for each of three years. The expected $3 billion in savings would remain in the physician-payment pool, resulting in increased payments to the other codes. The U.S. Department of Health and Human Services would solicit information from a representative sample of professionals in practices with more than 10 physicians to help determine payment accuracy. In addition, HHS would be tasked with ensuring that the global payment of surgical procedures accurately reflects the average number/type of visits following surgery. New appropriate-use criteria would be required to order advanced imaging and electrocardiogram services; the agency could expand appropriate-use criteria to include other services.

The proposal has already garnered the support of leaders of the House Committee on Energy and Commerce, which unanimously passed its own Medicare physician pay reform bill. The Academy will provide its feedback to lawmakers on the proposal by the Nov. 12 deadline. In the meantime, the Academy is generating support for a congressional sign-on letter by U.S. Reps. Bill Flores, R-Texas, and Dan Maffei, D-N.Y., urging House leadership to repeal the SGR formula. Academy members are encouraged to write to their representatives using the Academy’s online tools to persuade them to sign on as co-sponsors of the Flores-Maffei letter.