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Pathway for SGR Reform Act provides 3-month Medicare fix

By Jennifer Bresnick

A bi-partisan effort to postpone the yearly threat of major cuts to Medicare payments has succeeded in holding off the steep payment reductions for another three months after President Obama’s signature affixed itself onto the Pathway for SGR Reform Act of 2013 last week.  The new law will prevent a 20.1% reduction in reimbursements and provide for a 0.5% increase in Medicare payments through March 31, 2014 as providers and rule makers wrestle with payment reforms, falling revenues, and a long-term solution to the issue.

Every year since 1997, physicians have endured uncertainty over the sustainable growth rate (SGR), which has been averted each time by a Congressional measure that temporarily halts the cuts.  Recent estimates have put the cost of a permanent fix as high as $175 billion, but Congress and physician groups alike believe the time is right to solve the problem once and for all.  “For years, Medicare payments to doctors have been at risk of getting slashed, limiting seniors’ access to high quality care,” said Senate Finance Committee Chairman Max Baucus (D-MT) in November. “Enough with the quick fixes.”

The Pathway for SGR Reform Act gives Congress a little extra time to cook up a permanent solution, which will incorporate accountable care and value-based reimbursements for an industry shifting to patient-centered care.  Bonuses and penalties for performance measures will be integrated into Medicare payments on a larger scale, with payments fluctuating up to 1% for high and low performers.

“The revised [law] lays the groundwork for significant reforms that encourage new models of care such as the patient-centered medical home, simplifies and reduces the administrative burden on physicians, and gives CMS additional tools to address mis-valued physician services,” said Reid Blackwelder, MD, President of the American Academy of Family Physicians in a statement praising Congress’ quick action on approving the bill. “Importantly, the bill provides financial support to practices as they transition away from the traditional, procedures-focused model of care that responds to illness and move toward a comprehensive, coordinated and outcomes-based model that strives to prevent health problems and improve patients’ health.”

However, not everyone is thrilled about some of the provisions in the new rule.  American Association of Medical Colleges (AAMC) President and CEO Darrell G. Kirch, MD, expressed his dissatisfaction in a statement of his own.   “While the nation’s medical schools and teaching hospitals are encouraged by the prospect of restoring funding for these vital health investments, we remain disappointed that this budget proposal leaves the sequestration cuts to Medicare in place, and extends them for two years,” he wrote. “In addition, while we welcome the temporary relief from pending physician payment reductions that the SGR Reform Act provides, we are concerned that it is heavily financed by cuts to hospital payments, which will jeopardize access to care.”

While the law doesn’t satisfy everyone, most stakeholders are pleased that Congress is taking action on the issue in a timely manner.  “The bipartisan efforts that led to this legislation and these proposals are an important step toward getting the nation’s fiscal priorities in order,” acknowledges Kirch.  “For now, we urge lawmakers to…focus on developing a long-term, balanced approach to deficit reduction that takes into account the critical health care needs of all Americans.”

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