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Obama Signs Sustainable Growth Rate Repeal, Ending an Era

By Jennifer Bresnick

- Yesterday, President Obama put his pen to one of the most significant pieces of healthcare legislation since the Affordable Care Act.  The Medicare Sustainable Growth Rate repeal, passed in landslide votes by the House and the Senate, will simplify clinical quality reporting, end the decade-long uncertainty over painful Medicare payment cuts, and begin a major overhaul of the way physicians receive value-based reimbursement as the nation’s payers transition in earnest to accountable care.

Sustainable Growth Rate Repeal

Despite letting the legislation languish during a tense two weeks in which the Senate was on recess and the nation’s healthcare providers prepared themselves for the worst, the Medicare Access and CHIP Reauthorization Act (MACRA) cleared its last major hurdle earlier this week with a 92-8 vote after clearing the House with a similarly safe margin.

“This was a bipartisan effort, Republicans and Democrats coming together to do something that’s smart and common sense,” Obama said during a signing ceremony in the White House Rose Garden, USA Today reports. “My hope is it becomes a habit.”

The new law isn’t just notable for its ability to bring Congress together after years upon years of temporary patches that have run up the price tag of an ultimate fix.  The cost of the Sustainable Growth Rate repeal is projected to be more than $214 billion, but advocates believe it will successfully position Medicare for longer term sustainability while aligning the government’s reimbursement structures with the patient-centered quality care movement already sweeping the industry.

In addition to avoiding a 21 percent Medicare payment cut that was slated to go into effect on April 14, the SGR repeal extends the Children’s Health Insurance Program (CHIP) for another two years, institutes a 0.5 percent increase in Medicare reimbursement over the next five years, and establishes the Merit-Based Incentive Payment System (MIPS), that aligns CMS’ three major clinical quality programs: the EHR Incentive Programs, the Physician Quality Reporting System (PQRS), and the Value-Based Modifier (VBM).  Providers will be able to attest once for all three programs, addressing ongoing complaints that the administrative burdens of the programs are making participation difficult.

The law also encourages providers to transition to value-based reimbursement models. Providers who receive at least 25 percent of their revenue from participation in alternative payment models or innovative care delivery models like the patient-centered medical home (PCMH) will be eligible for a five percent reimbursement bonus starting in 2018.

MIPS also makes a concession to one of the biggest frustrations with meaningful use: the inflexible, all-or-nothing reporting structure that does not recognize improvement over time.  Providers participating in MIPS will be able to benchmark their improvement using individualized metrics, and will receive negative payment adjustments of up to 9 percent and financial incentives up to 27 percent of their Medicare reimbursements based on their ability to achieve improvements over their own previous performance.

Industry stakeholders have widely hailed the momentous legislation as a step in the right direction for quality care even as it ends a long decade of contentious uncertainty about the way many providers earn a large proportion of their income.

“For more than a decade, elderly and disabled Americans didn’t know whether they would continue to receive the medical care they needed. They couldn’t count on whether they could see the physician they’d had for years. But with today’s passage of MACRA, these patients can put those worries behind them,”  said Robert Wergin, MD, President of the AAFP.

“Medicare beneficiaries comprise one out of four patients in a typical family physician’s practice; for some, elderly and disabled patients constitute six out of 10 of their patients.  These individuals depend on their family physicians for preventing illness, treating problems if they do arise, coordinating with other health care team members, and ensuring the right treatment from the right professional at the right time. By passing MACRA, Congress has ensured uninterrupted health access security to their elderly and disabled constituents.”

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