Permanent Medicare ‘doc fix’ deal announced, but hurdles remain

After more than a decade of short-term patches to avoid deep physician payment cuts that would result from the flawed Sustainable Growth Rate (SGR) formula, lawmakers announced a bipartisan, bicameral deal to repeal the SGR had been reached in committee and will advance to both chambers of Congress.

However, the deal as constructed doesn’t appear to address how to pay for the fix, which lawmakers say still will require work.

“Building on bipartisan legislation unanimously reported out of the House Energy & Commerce and Ways & Means Committees, and reported out of the Senate Finance Committee, the unified legislation from the three committees repeals the SGR and transitions Medicare away from a volume-based system towards one based on value,” read a summary of the deal released by the House Energy & Commerce Committee.

According to the summary, the deal would repeal the SGR and ensure a five-year period of annual updates of 0.5 percent to help “transition to a new system.”

Three existing quality programs would be streamlined and consolidated into one incentive program. This would have the goal of improving payment accuracy for individual provider services, introducing physician-developed clinical care guidelines to reduce inappropriate care and requires development of quality measures through a collaboration among physicians and other stakeholders.

Physicians also would be incentivized to move to an alternative payment model or patient-centered medical home. A 5 percent bonus would be provided to physicians who receive at least 25 percent of their Medicare revenue in 2018 from an alternative payment model, with that 25 percent threshold increasing over time.

The current SGR patch is set to expire on March 31 and would result in a 24 percent cut to physician payments if no action is taken.

More work remains to be done, however, according to a statement from Rep. Joe Pitts (R-Pa.), chairman of the Energy and Commerce Health Subcommittee, who said legislators are only “half way there.”

“We only have agreement on policy,” said Pitts in the statement. “We still have to figure out how to pay for it, and I am under no illusions about how difficult that may be.  We are going to do our best.  We've already done more than most people thought was possible."