As reported last week, the House Energy and Commerce Health Subcommittee conducted a hearing on legislation that would repeal the sustainable growth rate (SGR) formula. The Subcommittee approved the bill by a voice vote. The legislation would allow Medicare physician reimbursements to grow by 0.5% annually over five years. Starting in 2019, Medicare would switch to an enhanced fee-for-service system that would provide physicians with updates and payment incentives based on their performance on certain quality measures. The quality measures would be based on:
- Care coordination;
- Clinical care;
- Patient experience;
- Patient population; and
The bill would allow physicians to opt out of the fee-for-service system and choose an alternative payment model that emphasizes efficient and quality care, such as:
- Accountable care organizations;
- Bundled payment programs; or
- Patient-centered medical homes.
However, the legislation still does not include details on how it will offset the cost of repealing the current payment system. The Congressional Budget Office has estimated the total cost of repealing the SGR would be $139.1 billion over 10 years.