SGR Repeal Requires New Focus on Quality Measurement

In a landslide vote of 392 to 37, the House of Representatives passed legislation last week to permanently repeal the Sustainable Growth Rate (SGR) designed to limit the increase of Medicare physician payments that has proven highly problematic for healthcare providers throughout the past decade. The bill, H.R. 2, the Medicare Access and CHIP Reauthorization Act, omitted information about ICD-10 implementation or further ICD-10 delay. The bill now moves to the Senate after it returns from a two-week recess on April 13.

According to the Centers for Medicare and Medicaid Services (CMS), it takes a minimum of fourteen days to pay claims from doctors. Lawmakers expect swift action from Congress so the government can then successfully execute payments without imposing pay cuts. Congress has passed seventeen patches (“doc-fixes”) over a twelve year period to avoid the drastic cuts in Medicare payments required by the SGR. CMS has said they have the capacity to maintain a status quo for another fourteen days after the first of the year.

RevCycleIntelligence.com recently spoke with Jeff Smith, Vice President of Public Policy at the College of Healthcare Information Management Executives (CHIME) to garner deeper insight about what the healthcare industry should now be focused on as the Senate’s hiatus ends in mid-April and what the future may now hold.

“We have to acknowledge this is not a done deal,” says Smith. “However, despite the fact that the patches are due to expire on March 31, physicians should not be worried they will get any kind of pay cut by CMS starting on April 1. That won’t happen.”

Regarding the future implications for the healthcare industry at large, Smith says there is a slow but steady shift in the Medicare reimbursement status quo.

“The implications as of right now are nonexistent but that’s simply because the bill hasn’t been signed and passed by the Senate or signed by the President,” says Smith. “Were that to come to fruition, this would be an incredibly important moment in time where this kind of behemoth steam liner called fee-for-service is starting to turn a little bit.”

Smith says this new legislation in combination with a January announcement from the Secretary of the Department of Health and Human Services (HHS) Secretary, Sylvia M. Burwell, establishing specific goals for value-based payment and alternative payment models for the first time in the Medicare program’s history actively sets the tone for a new era in Medicare reimbursement.

The goals of CMS and HHS closely coincide with one another as SGR legislation attempts to bend that shift towards payer for performance and away from fee-for-service, explains Smith.

“Were this to pass, you would see two or three really frenzied years of activity in policy making where HHS goes through a pretty intense process to figure out how to enact and translate the legislation into regulation so providers know what they’re supposed to do and whatever policies put out there are enforceable,” states Smith.

“This effort is all about trying to be able to attribute quality of care delivery to individuals and then pay those individuals based on that quality,” Smith says. “The potential net effect of this legislation would be much more visibility on care quality. That is a true benefit to beneficiaries.”

The trend towards value based payment is well underway. This legislation reinforces that in a substantial way, confirms Smith.

“Pretending it is now 2020, the way the legislation is set up, you are either a physician engaged in an alternative payment model like an ACO, or you’re participating in this merit based incentive program or MIPS,” Smith maintains. “Both of those buckets of activity are very dependent on value and quality and performance. Without question this legislation pushes value based payment in a really big way.”

One of the areas that will require special attention is that of clinical quality measurement, says Smith.

“The intent of the legislation is to pay people based on how they perform. In order to differentiate individuals on performance, you need measures,” Smith confirms. “The healthcare world is overrun with quality measures that are very processed oriented and not focused on outcomes.”

As the healthcare industry moves forward, physicians and providers will need to figure out ways to determine outcome measures as policy makers press for the use of electronic health records, says Smith.

“If history is any indication, physicians and hospitals have been rightly or wrongly resistant to publishing quality data publicly,’ Smith affirms. “That is not necessarily from physicians and hospitals not wanting to be transparent. They just haven’t bought off on the process and they don’t think the indicators HHS wants to make public are truly indicative of quality.”

“While we don’t have a lot of time to get our act together collectively on the quality front, I’m hopeful this will create some urgency around the need to get to a good place with quality measurement, especially electronically specified quality measures,” maintains Smith.

CHIME has been very supportive of the currently implemented ICD-10 transition date, says Smith.

“[CHIME has] resisted any attempts in Congress to delay further the implementation of ICD-10,” confirms Smith. “From our standpoint, we were very happy to see delay language was not included in this bill and we will be working the senate to make sure it doesn’t find its way in later in the process.”

Smith says worrying about future events is useless.

“I would be absolutely shocked if anything adverse happened relative to the current status quo,” he maintains. “That’s not to say that all of this pressure is going to ensure that the Senate passes this. There’s a decent chance they will pass it. The White House already indicated they will sign it.”

As Medicare celebrates its fiftieth birthday this year, healthcare providers wait and see what will happen later this month.

Stay tuned for more interviews this week from RevCycleIntelligence.com in reaction to SGR legislation.