Looking forward – February 2014

David B. Hoyt, MD, FACS

For approximately 12 years, surgeons have been operating under the annual threat of enormous Medicare payment cuts due to the flawed sustainable growth rate (SGR) formula that is used to calculate reimbursement. Each year, Congress has intervened to prevent these cuts from occurring by passing short-term patches. Although the American College of Surgeons (ACS) appreciates these efforts, we also have maintained that a long-term solution is needed and have called for repeal of the SGR.

It appears that Congress has now reached the tipping point with regard to SGR reform and seems more willing than ever to take meaningful action. The “What surgeons should know about” column on page 39 provides an overview of the status of congressional proposals to repeal the SGR. In this column, I focus specifically on what the College has done in the last year or two to assist Congress in the development of a realistic and equitable payment system.

Lawmakers are listening

It is important to note that Congress has heard the message that the College has been delivering on its Inspiring Quality Tour and is seeking to develop a new payment model that will reward health care professionals who take steps to measure and improve their outcomes and, thereby, reduce the cost of delivering patient care. Furthermore, the three congressional committees that oversee the Medicare payment system—the Senate Finance, House Ways and Means, and House Energy and Commerce Committees—have repeatedly sought the ACS’ input on their payment reform proposals. In fact, we are one of a handful of physicians’ organizations to have testified before all three legislative bodies. At those hearings, in meetings with committee staff, and in written correspondence, the College has advocated for implementation of a Value-Based Update (VBU)—a patient-centered model aimed at improving quality while controlling spending.

In addition, the College weighed in on proposals that the committees developed. The House Energy and Commerce Committee released its plan at the end of May 2013 and approved the Medicare Patient Access and Quality Improvement Act, H.R. 2810, on July 31. Two critical provisions in H.R. 2810 establish the following:

  • A 0.5 percent increase in the physician payment rate over the next 10 years and each year thereafter
  • A benchmarking system that would allow all physicians to share in bonus payments if they achieve a requisite score with respect to their ability to provide high-quality, cost-effective care

The College supports these concepts and other elements of the bill but has concerns about some other provisions.

Taking a stand

The Senate Finance and House Ways and Means Committees issued a bipartisan, bicameral legislative proposal to repeal the SGR at the end of October. The College’s leadership and advocacy and health policy staff reviewed the plan thoroughly and met several times to discuss it, with a focus on the following four elements:

  • A 10-year freeze on physician payment
  • Establishment of a Value-Based Payment Program that would measure and rank participating physician performance using a composite score system and under which the only way for a provider to get a bonus payment would be for another to take a cut
  • Implementation of an Alternative Payment Model (APM) path, which would allow qualifying physicians to receive incentives and avoid certain requirements through successful participation in Accountable Care Organizations, bundling, and other advanced APMs
  • Efforts to address the valuation of physician service codes, including special attention to the global payment for surgical services

In early December, the ACS Board of Regents voted unanimously to oppose the joint plan because of the 10-year physician payment freeze and the fact that the legislation provides inadequate incentives for the provision of value-based care. The ACS and a number of surgical specialty societies sent letters to the Finance and Ways and Means Committees expressing our concerns.

After receiving our comments, the House Ways and Means Committee made good-faith changes, including providing positive payment updates of 0.5 percent per year for three years, beginning in 2014. Accordingly, the ACS withdrew its opposition to the Ways and Means draft legislation; however, we maintained our opposition to the Senate Finance version, which had not been amended. On December 12, 2013, both committees moved forward with their markups and passed their proposals.

In addition, prior to adjournment for the holidays, Congress passed a three-month 0.5 percent Medicare physician payment increase as a bridge to allow for negotiations on permanent repeal of the SGR as part of the year-end budget deal. The 24 percent reimbursement cut is now scheduled to take effect April 1. At press time, Congress was facing the difficult task of combining the three committee-passed bills into a single proposal that can pass in both the House and Senate. Additionally, the difficult problem of deciding how to offset the sizeable cost of the package had been left unresolved. The ACS intends to play an active role in resolving the Medicare physician payment issue before the cuts take effect this spring and will continue to advocate on behalf of our Fellows and patients.

Now is the time

Another important development that occurred involved the Congressional Budget Office issuing a memo, in which the agency estimates that the cost of eliminating the SGR has shrunk to $116 billion, down from nearly $300 billion. With these new data and considering the strides made in 2013, the College’s leadership truly believes that this moment in time presents a rare window of opportunity to finally repeal the SGR and contribute to the creation of a more equitable, sustainable Medicare physician payment system.

We will likely be calling on you in the coming days to participate in grassroots advocacy efforts to achieve repeal. I anticipate that you will be eager to offer your support to help eliminate this persistent thorn in the profession’s side.

In addition, the College’s leadership and advocacy staff will continue to work with Congress and other stakeholders. We remain committed to reforming the Medicare payment system and creating a new value-based model that will positively affect our patients’ access to quality care.

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