From the American Academy of Ophthalmology

The U.S. House Committee on Energy and Commerce unanimously passed a bill this morning that would permanently repeal the outdated sustainable growth rate formula used to calculate Medicare physician pay. In its place, the bipartisan bill would implement a new system based on quality and efficiency. Significantly, this solution to the SGR maintains a fee-for-service model. Physicians would have the option to opt out, however, to instead participate in alternative payment models, including accountable-care organizations.

Key provisions
The Academy provided extensive input to members and staff of the committee as they developed the bill. While lawmakers have incorporated much of that input, the Academy’s Washington office continues to work to further refine language in the bill as it moves forward.

Long-sought goals achieved
The bill accomplishes several key changes the Academy has long worked for. It would:

1. Fully repeal the SGR formula.
2. Provide stable updates: For five years, beginning in 2014, physicians would get a 0.5 percent annual update. These positive updates would replace scheduled SGR cuts, including the 24.4 percent reduction that physicians face on Jan. 1, as a result of the SGR formula.
3. Retain a fee-for-service system: Beginning in 2019, physicians would have the option of moving to an alternative Medicare payment model or staying in a reformed fee-for-service system. Physicians participating in the fee-for-service option would continue to get 0.5 percent annual updates. The bill would create a new Update Incentive Program under which physicians could earn as much as a 1 percent additional update based on quality performance. Performance would be assessed on specialty-driven quality measures and clinical practice-improvement activities. The Centers for Medicare and Medicaid Services would be required to ensure that physicians receive quarterly updates on their quality performance.
4. Encourage development of new alternative payment models. The legislation would also establish an additional process for the development, testing and approval of new alternative payment models, beginning in 2015, that might work better for ophthalmology. Under this provision, providers and other stakeholders could submit proposals for new payment models.
5. Recognize the value of clinical data registries, such as the IRIS™ Registry (Intelligent Research in Sight), being developed by the Academy. The bill would allow physicians to use data registries to meet requirements including reporting quality measures in the Update Incentive Program.
6. Protect payment to specialists: As a result of the advocacy efforts by the Academy and other specialty associations, the bill does not include increases to primary-care physicians paid for by cuts to specialists.

Remaining Concerns
The Academy is working with lawmakers to improve the legislation. Particularly, the Academy seeks immediate relief from existing, burdensome quality program requirements and penalties, such as the Physician Quality Reporting System and the value-based modifier, before implementing the new Update Incentive Program.

Starting in 2019, physicians who remain in the reformed fee-for-service model and do not report any quality information could experience up to 5 percent in combined penalties. They would receive a 3 percent cut under the Update Incentive Program, in addition to the current 2 percent reduction under PQRS.

To partially fund the cost of the SGR repeal, the bill also directs CMS to identify misvalued codes for services under the fee schedule. Lawmakers expect this to provide a net reduction of up to 1 percent of total Medicare physician expenditures for 2016-2018. However, the Academy maintains that CMS is already aggressively challenging codes as misvalued.

What’s next
As the bill moves through the legislative process, lawmakers will work out more details, such as a way to fund the $139 billion cost of repealing the SGR formula. The Committee on Ways and Means, which shares jurisdiction over Medicare, may further consider the legislation upon lawmakers’ return from their August recess.

“The Medicare physician pay reform bill could be merged into larger legislation, such as a bill to raise the federal debt ceiling or reform the tax code,” said Catherine G. Cohen, vice president of governmental affairs at the Academy. “The Academy continues to work with lawmakers to refine the pay-reform legislation to ensure fair reimbursement for ophthalmologists.”

Members are urged to write to their lawmakers using the Academy’s online tools to encourage Congress to act to repeal the SGR formula. Discuss lawmakers’ pursuit of Medicare physician pay reforms on the AAO Eye on Advocacy Blog.

If you have questions, contact the Academy’s Governmental Affairs Office at 202.737.6662