Is the proposed SGR fix too vague to work?

The House of Representatives passed a bipartisan bill to permanently repeal the Sustainable Growth Rate (SGR) formula last month, but if the Senate also approves it, the fix may create a new set of problems, according to Vox.

Under the repeal plan, Medicare will now pay doctors based on how well they do their jobs, but it is hazy on how the government will accomplish this. "I'm very skeptical of this," Urban Institute Fellow Robert Berenson told Vox. "It's really absurd that we don't have any measures for most doctors that can place a value on their performance."

Fiscal conservatives take issue with the legislation as well, noting that it only provides for $35 billion in spending cuts over 10 years, compared to Medicare's projected $9 trillion in expenditures over the same timeframe, according to the Associated Press.

Part of the problem is that the 265-page bill doesn't establish which quality metrics Medicare will use as its basis for payments, and for many specialties, the best measure for care quality isn't available in patient claims, according to Vox. And the metric-setting process outlined by the bill requires the government to solicit quality indicators from doctor groups, essentially letting them set their own standards, according to the article.

To better refine a value-based system, healthcare leaders must take several steps, including standardizing the definition of value, developing payment models geared toward positive outcomes and aligning stakeholder interest, Curant Health CEO Patrick Dunham told Forbes.

The plan represents one of the biggest steps yet from the government to actively accelerate the transition from the traditional fee-for-service model to value-based care, Paul Keckley, managing director at the Navigant Center for Healthcare Research and Policy Analysis, wrote for Hospitals & Health Networks. "It's not just about replacing an unpopular physician compensation formula," Keckley writes. "It's about raising the stakes for clinically integrated networks of physicians, allied health professionals and their business partners to take on payer-sponsored risk."

President Barack Obama has pledged to sign the bill into law but it has not yet reached the Senate floor, FierceHealthcare previously reported. The Senate is due to vote on the bill when it returns from its recess next week.

To learn more:
- here's the Vox article
- read the AP article
- check out the Forbes article
- here's the H&HN article

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