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AMA supports SGR repeal, merit-based incentive system

By Kyle Murphy, PhD

The American Medical Association (AMA) is throwing its support behind a bill recently introduced into Congress that would repeal the sustainable growth rate and support the creation of a single system to manage the disbursement of merit-based incentive payments.

In a letter to Representative Michael Burgess, MD, (R-TX), AMA Executive Vice Present and CEO James Madara, MD, has reiterated the association’s opposition to previous efforts after solving “problem that has bedeviled lawmakers for more than a decade is a significant accomplishment.”

In lieu of SGR formula that the AMA is calling a “flawed policy,” the association is expressing its “strong” support for the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (HR 4015/S 2000), both of which were introduced into the House of Representatives and Senate on Feb. 6, 2014: Previous Congresses have spent more than $150 billion over unparalleled past 12 years to preserve access to care for Medicare beneficiaries by forestalling SGR mandated cuts. However, during that time, few steps have been taken to modernize the Medicare physician payment system to increase quality and value. The legislation, in contrast, contains important reforms that will support improvements in health care delivery. Furthermore, by ending the cycle of temporary patches to a flawed system, this proposal represents not only critical payment and delivery reform, but prudent fiscal policy as well.

In a release issued yesterday, the AMA has urged Congress to fast-track the legislation. “Congress must seize this opportunity to strengthen Medicare and end the costly pattern of short-term patches to a flawed formula that has frustrated physicians, threatened access for beneficiaries, and created a budgetary dilemma from which Congress has struggled to emerge for more than a decade,” said AMA President Ardis Dee Hoven, MD, in a public statement.

While the major aim of the proposed legislation is the SGR repeal, it also contains provisions that would incentive alternative payment models. In particular, the bills would combine a number of performance programs under the umbrella of the Merit-Based Incentive Payment System (MIPS). This includes meaningful use, quality reporting, and value-based payments.

Both pieces of legislation incentivizes care coordination efforts for patients with chronic disease, introduces physician-developed clinical care guidelines to improve the safety of care and reduce wasteful spending, and requires the development of quality measures in close collaboration with physicians and other stakeholders.

Additionally, the proposed bills contain provisions related to alternative payment model (APM) incentives. Providers receiving a significant portion of their revenue via an APM or patient-centered medical home (PCMH) would be eligible for a five-percent bonus. Between 2018 and 2019, participants would need to receive at least 25 percent of their Medicare revenue through an APM, with these thresholds increasing over time.

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