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Bipartisan Medicare “Doc Fix” Compromise Legislation Released

February 20, 2014 Business & Tax Blog Medicare

The United States House Energy and Commerce and Ways and Means Committees and the Senate Finance Committee have released bipartisan compromise legislation that would repeal the Sustainable Growth Rate (SGR) formula for physician payments and transition Medicare towards a value-based payment system.

The legislation “not only fully repeals the broken sustainable growth rate formal, but puts in place real reforms that move Medicare away from a fee-for-service model that promotes greater spending to one that encourages better results,” Sen. Orrin Hatch said in a press release announcing the legislative moves.

The new compromise bill combines proposals in earlier versions of Sustainable Growth Rate repeal legislation that passed committees in the House and Senate in 2013. The new legislation would eliminate the 20-plus percent payment cut scheduled for April 1, and instead provides a 0.5% annual update for a five-year period followed by a transition to the new payment system.

The bill would consolidate existing quality programs “into a streamlined and improved program that rewards providers who meet performance thresholds, improves care for seniors, and provides certainty for providers,” and would introduce physician-developed clinical care guidelines to reduce inappropriate care, require the development of quality measures, and ensure close collaboration with physicians and other stakeholders regarding the measures used in the performance program, according to a bill summary.

The bill provides for a 5% bonus for providers who receive at least 25% of their Medicare revenue from an alternative payment model or patient-centered medical home in 2018-2019 and expands the use of Medicare data for transparency and quality improvement.

John L. Moore