SGR repeal likely, but not a cure-all for physician challenges

Although physician groups criticized legislators for taking recess before voting on a proposed repeal of the Sustainable Growth Rate (SGR) formula, chances are good that the Senate will follow the House's lead and approve HR 1470 within the next two weeks, Medical Economics reported.

Without Senate action on the legislation, physicians face a 21.2 percent reduction in their Medicare reimbursements. The Medical Group Management Association (MGMA), among others, is hopeful the government will avert this outcome. "MGMA is extremely disappointed the Senate failed to act on permanent SGR repeal and will allow a 21 percent physician payment cut to take effect on April 1," Halee Fischer-Wright, M.D., MGMA president and chief executive officer, said in an announcement. "We urge the Senate to vote to repeal the SGR immediately upon return from the April recess and remove its dark cloud over physician group practices."

If passed, provisions of HR 1470 include the following:

  • Repeal of the SGR formula
  • A guaranteed annual 0.5 percent increase in Medicare reimbursements through 2019, with the 2019 payment level to be maintained through 2025
  • Consolidation of the Meaningful Use, Physician Quality Reporting System and Value-based Modifier programs into one program known as the Merit-based Incentive System

The legislation also raises Medicare premiums for higher-income individuals, extends the Children's Health Insurance program for two years and adds funds for community health centers over the next two years.

While at face value this is all good news for physicians, a post from Navigant Healthcare warns that the bill is not a panacea for medical practices. For starters, this legislation will force physicians into value-based payment systems, after which there will be no looking back toward fee-for-service, noted author Paul Keckley, Ph.D., managing director at the Navigant Center for Healthcare Research and Policy Analysis.

Second, while a 0.5 percent guaranteed annual raise will eliminate the financial uncertainty that has plagued physicians for nearly two decades, it will still be insufficient to operate a medical practice under constant new market and regulatory demands.

"So, if the Senate passes HR1470 and the president signs it into law next month as most expect, the economic reality for physicians and their business partners will be clearer but the challenges in operating no less daunting," Keckley concluded.

To learn more:
- see the bill
- read the article from Medical Economics
- check out the post from Navigant Healthcare