House hearing focuses on quality’s role in SGR reform

Washington Legislation that modernizes the Medicare payment system will need to support physicians who are adapting to pay models based more on quality and efficiency, doctor organizations told lawmakers at a recent congressional hearing.

House Republicans have drafted a framework for repealing the sustainable growth rate formula used to calculate Medicare payments and control program spending. The SGR is broken and must be repealed, said Rep. Kevin Brady (R, Texas), chair of the House Ways and Means health subcommittee. The formula is projected to cut payments by 24.4% in 2014 unless Congress intervenes.

“Physicians, we know, are understandably frustrated,” Brady said. “In our communities, we’re witnessing firsthand how the current broken system is forcing doctors to rethink their future with Medicare, consider closing their private practices or joining up with a hospital. And who can blame them?”

Lawmakers have held several hearings so far in 2013 and gathered testimony from physicians and health policy experts on eliminating the SGR and installing a modern pay system. The health subcommittee held a May 7 hearing to discuss how the federal government, along with physicians, can develop new payment policy.

The American Medical Association has called for a variety of payment models to accommodate the diverse range of physician practices. Under the proposal, new models would become available after a stable, five-year transition period during which physicians would be able to help develop, test and evaluate models.

The American College of Surgeons has advocated for a value-based overhaul of the payment system, said David Hoyt, MD, the college’s executive director. Payment updates would be based on improving quality and patient safety.

“We have learned measuring quality improves patient care, increases the value of health care services and reduces cost,” Dr. Hoyt said. “The savings gained are the direct result of improving quality outcomes.”

Similar to the AMA plan, ACS’ idea for a transition to a new payment system would occur after five years of stable payments, which should be adjusted annually to keep up with practice costs, he said. This would give Medicare officials and physicians time to test new pay models and give doctors an opportunity to make investments and upgrades to their practices.

But using lower variable payment rates to offset higher pay to physicians outperforming others is undesirable, Dr. Hoyt said. Physicians with higher quality scores in the system must be encouraged to share successful techniques with their colleagues.

“We would like to emphasize that a zero-sum, budget-neutral scoring methodology for the variable rate could significantly hamper collaborative care, the sharing of best practices among providers and hinder our ability to recognize all possible savings,” Dr. Hoyt said.

Expansion of working models

Physicians ready to move beyond the current pay system should be allowed to participate in approved value-based payment programs beginning Jan. 1, 2014, said Charles Cutler, MD, chair of the American College of Physicians board of regents. Thousands of primary care practices caring for tens of millions of privately insured patients already have achieved accreditation for the medical home care model.

“Extensive data demonstrate their effectiveness, yet Medicare support for this model is mostly limited to several hundred practices participating in Medicare’s comprehensive primary care initiative,” Dr. Cutler said.

The limited Medicare initiative uses the current fee-for-service model and monthly patient management fees to support the patient-centered medical home, and it allows practices to share savings generated to the program. Medicare needs to recognize and support care coordination activities led by the other accredited, high-quality care medical homes in this country, Dr. Cutler said.

“The bottom line is patient-centered medical homes have the track record to be scaled up and supported by Congress now,” he said.

Bonus payments for practice improvement, grants to encourage practice changes, payment withholds with incentives, and other payment tools used by HealthPartners in Minnesota can be replicated and scaled across the country, said Patrick Courneya, MD, health plan medical director at HealthPartners. Physicians may find care models they wish to join, but current payment models are too rigid to enable change. Practices, including small physician offices, will need support to move away from fee-for-service, Dr. Courneya said.

“These kinds of payment models supported with the kind of infrastructure and transitional support we have used in our marketplace can really have an impact both in inner-city concentrated areas as well as rural communities,” he said. “And we have seen it working.”