Washington Update - December 2013

AGS Submits Comments Regarding Repeal of SGR to Policymakers
The American Geriatrics Society (AGS) recently submitted its recommendations to the Senate Finance and House Ways and Means committees regarding both the repeal of the Sustainable Growth Rate (SGR) formula and reforming the way physicians and other healthcare providers are compensated. The proposal, released October 30, would permanently repeal the SGR update mechanism, reform the fee-for-service payment system by providing greater focus on value than on volume, and encourage participation in alternative payment models. In its letter, AGS provided detailed recommendations, on several proposals, including value-based reporting, alternative payment models, and payment for care coordination. To read the society’s recommendations visit www.americangeriatrics.org.

AMA Confirms Support for Congressional Alternative to SGR, But Not Pay Freeze  
The American Medical Association’s (AMA) policymaking arm—in which the American Geriatrics Society participates—continued to voice its support for the Senate Finance and House Ways and Means committees’ proposal to repeal Medicare’s long-problematic Sustainable Growth Rate (SGR) formula. At the same time, however, the AMA’s House of Delegates recently made it clear that it opposed the 10-year-long pay freeze for healthcare providers covered by the SGR that the Senate and House committees have recommended. Meeting in November, a coalition of AMA delegates endorsed an alternative to the freeze that calls on the association to advocate for pay increases, among other measures.

MedPAC Looks for Movement With SGR Remedy
For years, the Medicare Payment Advisory Commission (MedPAC) has suggested options for overhauling Medicare’s Sustainable Growth Rate formula. Now MedPAC is taking a new tack. The commission has decided to reiterate its previous suggestions, “and not vote any new recommendations or even re-vote on past recommendations,” MedPAC Chairman Glenn Hackbarth explained. Rather, the commission will “focus on reiterating our [previously] articulated” principles,” he said during a recent meeting. “The reason is that there is momentum on this issue and the last thing I want to do is disrupt the process now underway,” he added, referring to the work of leaders in the Senate Finance and House Ways and Means committees.

Quarter of Hospitals Face Cuts in 2014 Under CMS’ Value-Based Purchasing Program  
Roughly a quarter of hospitals participating in Medicare’s value-based purchasing program will get payment increases in 2014; about half will “break even” over the year; and the remaining quarter or so will see an overall decrease in their Medicare payments, according to Modern Healthcare. The budget-neutral program will be funded through a 1.25% cut in hospital’s base-operating diagnosis-related groups this coming year, up from 1% in 2013. It will increase incrementally, by quarter-percentage points, over the next 2 years until it reaches 2% in 2017.
“We’re pleased with this round of results,” said Patrick Conway, CMS chief medical officer and director of the Center for Clinical Standards and Quality. “Hospital value-based purchasing provides a useful snapshot of how hospitals are performing on important indicators for patient safety, care, quality and well-being.” This year’s average bonus was 0.24%, while the average penalty was 0.26%, up from 0.21% in 2013, according to a Kaiser Health News analysis.