Public Policy

SGR Repeal: What It Means for Hospitalists


 

On April 16, President Obama signed into law a bipartisan, bicameral piece of legislation that not only fully repealed the sustainable growth rate (SGR) but also permanently eliminated the recurring threat of physician payment cuts in Medicare.

Along with the SGR repeal, the Medicare Access and CHIP Reauthorization Act, or MACRA, institutes the Merit-based Incentive Payment System (MIPS). Starting in 2019, the MIPS will consolidate all of Medicare’s current quality reporting programs: the Physician Quality Reporting System (PQRS), the Value-Based Payment Modifier (VBPM) Program, and the meaningful use (MU) requirements, and will restructure their associated penalties.

Under current law, however, physicians are still required to participate in PQRS, VBPM, and MU, or face their associated penalties until the MIPS is fully implemented in 2019. MACRA also incentivizes the adoption of alternative payment models (APMs). APMs are broadly defined within the law as models that involve both upside and downside financial risk (e.g. ACOs or bundled payments) or patient-centered medical homes, provided they improve quality without increasing costs or lower costs without decreasing quality. Those participating in and deriving substantial revenue from an approved APM will not only be exempt from reporting within the MIPS, but will also receive an automatic 5% bonus in their Medicare billing.

Pay-for-performance programs lack relevant quality metrics and are structured in ways that do not account for the realities of providing inpatient care, which increasingly result in headaches for hospitalists.

Pay-for-performance programs lack relevant quality metrics and are structured in ways that do not account for the realities of providing inpatient care, which increasingly result in headaches for hospitalists. MACRA has the potential to alleviate this burden and reshape the way in which hospitalists are measured.

SHM worked closely with key Congressional committees, as they were developing the SGR repeal legislation, to include flexible language that could better align quality measures for hospitalists. As a result, buried deep in the text of MACRA lies a two-sentence section that makes this goal possible. The law authorizes the “use [of] measures used for a payment system other than for physicians, such as measures for inpatient hospitals, for the purposes of the performance categories [quality and resource use].” Permitting the use of measures from other payment systems allows hospitalists to have the opportunity to align their quality and resource use performance with that of their institutions. As this alignment is not allowed under current law, it brings new potential to level the playing field and increase the relevance of hospitalist quality reporting in the future.

SHM has been pressing CMS to pursue this concept for the last three years, and MACRA finally gives CMS clear authority to move ahead.

The law is not overly specific, so it is not exactly clear how this provision will be implemented. SHM will remain vigilant, working with CMS to ensure that the MIPS-related regulations set the stage for more fair assessment of hospitalists when the MIPS goes into effect in 2019.

Although hospitalists face an uphill battle in terms of current PQRS reporting, the flexibility contained in MACRA provides an important first step toward a better pathway to reporting quality measures that are fair and relevant for hospitalists.


Ellen Boyer is SHM’s government relations project coordinator.

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