Permanent “˜Doc-Fix’ Isn’t Happening, and Short-Term Solution Isn’t Ready

A permanent repeal of the Sustainable Growth Rate formula — the flawed payment model for Medicare physicians — won’t happen before the holiday recess, according to an official with the House Ways and Means Committee.

With a permanent solution off the table, the House is now tasked with acting on a short-term “doc-fix” before adjourning. If no change is made, physicians who provide services to Medicare beneficiaries will face a 20 percent pay cut starting Jan. 1.

But though the House is slated to leave Friday and the Senate shortly thereafter, officials in both chambers say the language to stop the reimbursement drop is yet to be finalized.

Lawmakers had been gunning for a permanent solution to the SGR payment model, which requires annual cuts to Medicare reimbursements to balance federal spending with intake. Since 2003, Congress has passed 15 “doc-fixes” to stop the cuts from taking effect. It’s an expensive ordeal, adding up to a grand total of $150 billion, which is why there was optimism about a permanent solution after the Congressional Budget Office’s cost evaluation came in relatively low earlier this year. On Friday, the cost dropped even further to $116.5 billion.

But with time running out, those hoping for a permanent fix will have to settle for incremental progress: The Senate Finance Committee is scheduled to mark up a bill aimed at an eventual permanent fix Thursday, and the House Ways and Means Committee could do the same.

Draft language of the House Ways and Means version shared with National Journal indicates that the repeal of the SGR would be replaced by a value-based performance incentive program. Physicians’ 2013 payment rates would continue through 2023, when an annual 1 percent increase would take effect (2 percent for physicians who participate in tests of new payment models).

Beginning in 2017, though, physicians’ payments would be adjusted based on four performance metrics: quality of care, budget-neutral resource use, meaningful use of electronic health records, and clinical-practice improvement activities. Improvement from one year to the next would be taken into account when determining increases and decreases in pay.

Funding for value-based system will increase over time, from 4 percent of spending in 2017 and maxing out at 12 percent in 2021. Physicians can qualify for gains and losses less than or equal to the total spending percentage of that year.

The proposal also grants the Health and Human Services Department the power to review of the cost of services, to establish criteria for evidence-based care, and to create a system for Medicare patients to review past performance of physicians.