Physicians say good riddance to SGR, applaud Senate repeal vote

Physicians and healthcare industry leaders hailed last night's historic Senate vote to repeal the much-hated, flawed sustainable growth rate formula (SGR), a move many believe will allow more providers to take part in new delivery models that reward value and boost coordinated, high-quality care.

The Senate overwhelmingly approved the bipartisan House $214B "doc fix" bill to retire the SGR formula, which is used to calculate Medicare payments to physicians. After fits and starts of discussion about the bill throughout the day, the Senate finally voted shortly before 10 p.m. ET Tuesday, 92-8 to repeal the SGR. The vote came in the nick of time as the current SGR patch expired at midnight, which meant a 21 percent payment cut in Medicare reimbursement would take place unless the Senate approved the legislation.

The bill, the Medicare Access and CHIP Reauthorization Act, will replace the SGR with an annual 0.5 percent raise for five years. The legislation also awards a 5 percent bonus to providers who accrue at least a quarter of Medicare reimbursements under alternative value-based payment models, such as patient-centered medical homes, between 2018 and 2019. It also funds the Children's Health Insurance Program and community health centers for two more years.

The bill now heads to the desk of President Barack Obama, who previously said he would sign the legislation.

Moments after the vote, which Sen. Orrin Hatch (R-Utah) called a "monumental achievement," trade groups released statements applauding the vote.

The Texas Medical Association called the measure a victory that lifts an immense weight off the shoulders of providers. The vote means physicians can focus their "energies on removing the bureaucratic impediments that get in the way of good patient care" and work on Medicare reforms that will allow for high-quality care to senior citizens, military families, disabled and low income patients, it said.

Blair Childs, senior vice president of public affairs, Premier, Inc., said the nation's providers are pleased to finally close the door once and for all on the flawed formula and the "endless rollercoaster of perpetual patches that are often offset by cuts to hospitals."

"We strongly support rewarding clinicians for joining new payment models that align incentives across healthcare provider silos and for more patient centric care, such as bundled payment and shared savings," he said. "This legislation will spark greater participation in these models, promoting patient centric, coordinated and high-quality care across the continuum."

During a call with news reporters this morning, American Medical Association CEO and Executive Vice President James Madara said the bill will help propel the work of the AMA to improve the overall health of the nation. Now that the SGR is behind them, Madara said, AMA members "can work toward other elements with Congress, CMS and others, putting patients first, ensuring access to care, looking to reduce overall costs, and improving healthcare quality."

Madara said the SGR formula threatened patients' access to care and the ability of physicians and practices to invest in new payment and delivery systems. The new measure removes those barriers and also allows providers to focus on the management of chronic diseases, such as diabetes and hypertension, and coordination of care.

The ongoing debate over the SGR often overshadowed the AMA's work on improving payment delivery system models, according to Madara, adding that he hopes the repeal will shine a light on its other initiatives.

Prior to the vote, many criticized the legislation for adding billions to the national debt over the next 10 years, and speculated that providers would just have to deal with a new reimbursement formula in 2025. But Madara doesn't think that providers will necessarily have to go back to the drawing board 10 years from now, stating that the AMA will begin now to work with Congress and CMS to continue to seek improvements and solutions to reimbursement mechanisms.

He also rejected comments that the bill will result in massive physician practice consolidations.

"I don't think we are going to end up in one homogenous place," he said. "In fact, some consolidations have reversed. That may or may not happen. We have to keep recognition of the type of country we are and our diversity. There will be consolidation in some areas but we need to make sure there is a flexible range of solutions that physicians and patients can pick ones that best suit them."

To learn more:
- here's the TMA statement
- read the Premiere Inc. statement