Permanent SGR Reform

CAP seeks full repeal of the SGR, more flexible quality measures

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After 17 years of "patching" the sustainable growth rate (SGR) formula, the College of American Pathologists (CAP) continues to advocate for total elimination of the program.

The unpopular sustainable growth rate is based on a formula from 1997 computing the growth in Medicare spending and that of the American economy. Simply put, physician fee schedules for the upcoming year are reduced if Medicare Part B spending exceeds projections. Since the formula was enacted, Medicare spending continues to rise at a much faster than the country's general economic growth.

Last spring, CAP and other medical groups including the American Medical Association, American College of Surgeons, the Alliance of Specialty Medicine voiced strong opposition to Congress on another patch.  CAP has long championed a full repeal and the movement is becoming more popular throughout the medical community. However, partisan disagreement about financing the repeal prevailed and another temporary legislative patch froze rates until March 2015.

"Not only pathologists but the entire medical community is concerned about the SGR," said George Kwass, MD, FCAP, chair of the CAP's council on government and professional affairs. "Everyone's looking at a potential reducation in payment in the vicinity of 24%. This certainly looms large every year and requires a great deal of lobbying, financial and psychological effort to overturn annually. It would be nice to know year-to-year a certain security in payment levels for services so one can plan the business aspect of their practice."

In addition, the temporary patch neglected what CAP president Gene M. Herbeck, MD, FCAP, referred to as "critical Medicare reforms" such as closing the self-referral loophole or pathologists' concerns about the current pay-for-performance program.

Pathologist-Specific Concerns
Kwass echoed the sentiment that the nuances of laboratory medicine were absent from the short-term fix and the association would like to see those addressed in a permanent solution.

The SGR Repeal and Medicare Provider Payment Modernization Act (HR 4015) includes a provision backed by the College that provides more flexibility for pathologists to meet requirements under Medicare's Physician Quality Reporting System (PQRS), Electronic Health Record (EHR) Incentive Program, and the Value-Based Modifier (VBM). Under the current system, eligible practitioners and group practices who successfully report quality information can receive an incentive payment of 0.5 % of their total estimated Medicare Part B Physician Fee Schedule (PFS) allowed charges for covered professional services furnished during that same reporting period. In 2015, the PQRS will begin adjusting payments for those providers who do not satisfactorily report data, reducing allowed charges by 1.5 percent for 2015 and 2.0 percent for 2016 and subsequent years. Reporting requirements require eligible practitioner and group practices to report on at least one valid measure. Data can be reported via claims, qualified PQRS registries, or a qualified EHR product, or PQRS data submission vendor.

Further, the bill addresses the CAP's long-held concerns that quality initiatives were designed for office-based physicians and do not capture the many contributions pathologists add to patient care and the health system.

"Our main concern in this reform is not ending up with a one-size-fits-all solution to issues like the VBM, value-based purchasing, and meaningful use issues," reinforced Kwass. "Not all physicians practice the same. Some specialties deal in laboratory information systems and interface and populate electronic health records. We shouldn't be penalized for not having an electronic health system as defined by the government because it can simply be a system we don't work in. We work electronically and did so well before the EHR. Our practice nuances need to be recognized. A provision in the permanent bill would allow the Secretary of Health and Human Services alternative methods for judging value."

Finding the Funding
The repeal of the SGR elimination last year came down to funding. The kick-the-can-down-the-road mentality has made elimination an increasingly expensive proposition. In 2005, it would've cost less than $50 billion to repeal. In 2014, the estimate from the Congressional Budget Office and non-partisan Joint Committee on Taxation was $138.4 billion over 10 years.

One Democratic proposal endorsed by the American Medical Association entailed using the Overseas Contingency Fund to offset the repeal. Significantly more spending for U.S. forces in Iraq and Afghanistan is allotted than is projected to actually occur. Other bids offered included changes to the Medicare Part D rebate program and reducing the market exclusivity period for biologics, combining Medicare Part A and Part B deductibles, overhauling MediGap, increasing the amount higher-income beneficiaries pay for Part B coverage or raising the Medicare eligibility age. All of these options raise opposition from one side of the political aisle, not to mention the American public, so Kwass thinks the most realistic time frame is during the lame duck session after the mid-term elections.

"CAP is agnostic as far as a pay-for," he commented. "We do offer the repeal of the in-office exception for services as part of the pay-for. As an organization, we encourage our members to be in communication with their representatives in Congress. Hopefully, the legislators will listen."

Robin Hocevar is on staff at ADVANCE. Contact rhocevar@advanceweb.com.

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