AMA Acts on Medicare Payment as Congress Considers Legislation

In response to news from Capitol Hill that a legislative proposal was in play to end the much-derided sustainable growth rate (SGR) component of the Medicare payment formula, the AMA voted during its recent Interim Meeting in Washington, D.C., to continue advocating for repeal of the SGR, while upholding the AMA’s principles of pay-for-performance, which were adopted in 2005 (Psychiatric News, July 15, 2005).

Legislation under consideration in the Senate Finance Committee and House Ways and Means Committee would end the SGR and replace it with a “value-based performance (VBP)” payment program containing a set of incentives to encourage physician practices to adopt quality measures and integrated care. The measures appear to have bipartisan support.

Without repeal of the SGR, physicians are facing a staggering 24 percent across-the-board cut in Medicare reimbursements in January.

AMA/Ted Grudzinski

Repeal of the SGR has been one of APA’s and the AMA’s leading legislative priorities, and at the AMA’s November meeting there was a widespread sense of anticipation that the goal was in sight. Importantly, however, at press time the legislation on the Hill called for a 10-year freeze of physician Medicare pay. That’s because every year for close to a decade, Congress has stepped in at the end of the year to avert increasingly severe physician payment cuts mandated by the SGR—adding to an accumulating Medicare program debt.

The AMA’s resolution opposes the 10-year payment freeze and directs the AMA to advocate with the Centers for Medicare and Medicaid Services and Congress for “alternative payment models, developed in concert with specialty and state medical organizations, including private contracting as an option.”

An amendment was added to the resolution during the meeting that asks the AMA to continue to advocate for “positive updates”—that is, increases in Medicare physician payment. Said one physician on the floor of the House of Delegates, “We are at an uncommon time when we have a chance to do something really important, to speak with a unified voice and see the SGR ended. What this [amendment] tells our constituents is that the SGR fix will not end our advocacy efforts.”

In a November 15 letter to the Senate Finance Committee and House Ways and Means Committee, APA CEO and Medical Director Saul Levin, M.D., M.P.A., said, “APA believes that the proposal’s framework is consistent with what Congress has voiced regarding a repeal and replacement of the SGR: a strong emphasis on policy reforms that reward quality . . . and encouragement of integrated care.”

He added, “APA supports the framework’s call for significant and ongoing stakeholder collaboration on the development of quality, resource use, clinical practice improvement, and electronic health record meaningful-use measures under the proposed Value-Based Performance program. APA has urged lawmakers in recent communications regarding SGR repeal to include new funding to support quality measure and quality initiative development. . . . ”

Levin expressed serious concern about the possibility of a 10-year freeze on physician payments, noting that “APA recommends some form of positive update as physicians work to transition fully into the VBP.”

John McIntyre, M.D., chair-elect of the AMA’s Council on Medical Services, which drafts much policy with regard to quality measures, integrated care, and Medicare payment, said a recent estimate by the Congressional Budget Office (CBO) showing that repeal of the SGR would be far less costly than previously projected provided a strong impetus to legislators in both parties that now was the time to repeal it. The CBO estimate put the cost at $147 billion. “Obviously that’s a lot, but its 50 percent less than what had been projected in 2012,” McIntyre said.

He described the proposed 10-year freeze as “infuriating,” but he echoed the sense of relief at the AMA meeting that an end to an exhausting multiyear legislative battle was in sight.

“Over the last decade, there has been a growing fatigue among physicians in regard to the amount of effort that has gone into trying to repeal the SGR,” he told Psychiatric News. “What has been particularly frustrating for physicians is that there has appeared to be uniform support for ending the SGR, and there is almost no one in Congress who thinks it’s a rational or workable formula. Yet it hasn’t happened.”

McIntyre also noted that the draft legislation in Congress would sunset penalties under the Physician Quality Reporting System, Value-Based Payment Modifier, and “meaningful-use” electronic health record programs at the end of 2016. So even if payment levels overall would be flat for the next decade, ending these penalty programs would, at least theoretically, effectively increase physician payments.

He emphasized that the legislation effectively takes the $147 billion “off the table” so that future negotiations with Congress about updates to Medicare payment become much easier.

At press time, the fate of the congressional legislative proposals was uncertain and subject to intense negotiation. In her opening address at the Interim Meeting last month, AMA President Ardis Hoven, M.D., urged delegates not to reject the legislative proposal while it was still in draft form. “To walk away now before we know what modifications may be made would be ill advised.” ■