The long (and winding) road to repealing the SGR
The physician community has reason to celebrate. On April 16, President Obama signed into law H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). In one swoop, H.R. 2—perhaps the most critical piece of health-related legislation since the Affordable Care Act—delivered to the physician community not one, but several legislative victories. Most notably, of course, are the provisions to permanently repeal the flawed Sustainable Growth Rate (SGR) formula used to determine payments to physicians under the Medicare program. Repealing the SGR has long been a top legislative priority for the AAO-HNS and others in the physician community. In fact, it took more than 14 years and laboring through 17 short-term payment “patches” to arrive at the policy agreements that coalesced in H.R. 2. So, what does the bill do? In regard to Medicare physician payments, H.R. 2 stipulates: Immediate repeal of the SGR formula. A “period of stability” with a .5 percent increase in physician payments for five years. A 5 percent added incentive payment for physicians in new Alternative Payment Models (APMs). Increased funding for technical assistance to practices of 15 or fewer professionals. Creation of a technical advisory committee to review and recommend physician-developed APMs via an open comment process. Other “victories” included in H.R. 2 are: Consolidation of three existing incentive programs (Physician Quality Reporting System, Value-Based Modifier, and Meaningful Use Electronic Health Records). Combining these programs via a new Merit-Based Incentive Payment System (MIPS) program will help to set performance thresholds and offer flexibility for specialties in achieving the necessary reporting requirements for bonus payments. Rescission of the new CMS policy to transition all 10- and 90-day global payment codes to 0-day codes by 2018. Also noteworthy about H.R. 2 is the manner in which it was passed. In total, 484 lawmakers in both chambers voted in favor of the bill. Given that legislative gridlock and partisan bickering have become the norm on Capitol Hill, the bipartisanship achieved on H.R. 2 was surprising and refreshing. For so long, the SGR issue has operated as a “vacuum” on Capitol Hill, often inhibiting work on other critical initiatives. In fact, it was frustration relating to the cyclical “doc fix” that led Congressional leaders, namely Speaker John Boehner and Minority Leader Nancy Pelosi, to—finally—begin private negotiations to permanently address the SGR issue. In reality, the burst of activity to resolve the SGR issue this spring has been two years in the making (see timeline). Throughout the 113th Congress, leaders from the committees with jurisdiction over health issues in both the House and Senate worked in earnest (with the physician community) to craft the Medicare physician payment replacement policies that were ultimately included in H.R. 2. In addition to hearings, briefings, hill meetings, stakeholder sessions, and mark-ups, a key component to the evolution of the SGR replacement policies were myriad comment letters submitted by organizations across the healthcare spectrum. For example, in 2013, at the height of the policy development phase, the AAO-HNS alone submitted seven SGR-related comment letters. With the SGR replacement policies in place by early 2014, efforts to advance the bill were thwarted by the question of how to pay for the measure. What changed? The answer is that Congressional leaders and rank-and-file lawmakers agreed to view the SGR formula as the budget gimmick it was. The track record for SGR patches was proof that Congress never intended to allow sweeping cuts to take place. So, why not finally fix the problem—even if it meant not funding the whole package. In the end, after substantial negotiations by party leaders, only the add-on provisions included in H.R. 2 (e.g., extension of the CHIP program) were paid for. Next steps Is the SGR replacement policy perfect? No. It is, however, a starting point. Now the AAO-HNS will work toward improving upon the foundation set forth in H.R. 2. For more information regarding H.R. 2, and/or additional AAO-HNS federal legislative priorities, contact legfederal@entnet.org or visit www.entnet.org/advocacy. TIMELINE OF SGR REPEAL ACTIVITIES 113th Congress February 2013 • House Energy & Commerce (E&C) Committee holds hearing on SGR issue. • House Ways & Means (W&M) Committee staff briefs physician community on development of SGR legislation. • Congressional Budget Office (CBO) reduces cost estimate for SGR repeal. May 2013 • House W&M holds hearing to collect information on potential reform proposals. • Senate Finance Committee solicits feedback from physician community regarding future of fee-for-service system. • House E&C briefs physician community on “framework” for SGR repeal legislation. June 2013 • House E&C releases revised SGR framework. July 2013 • House E&C holds mark-up of SGR bill and unanimously votes to advance the proposal. October 2013 • Senate Finance and House W&M release legislative framework to repeal the SGR formula. November 2013 • Staff for Senate Finance and House W&M brief physician community on legislative framework. December 2013 • Senate Finance holds mark-up of SGR framework; approved by Committee. • House W&M holds mark-up of SGR legislation; approved by Committee. • Two-year budget deal signed into law; includes three-month SGR “patch.” February 2014 • Bipartisan, bicameral legislation (H.R. 4015/S. 2000) to repeal the SGR formula and reform the Medicare physician payment system introduced in Congress. March 2014 • H.R. 4015 passed by U.S. House of Representatives with partisan offset. • U.S. House passes 12-month SGR “patch” via voice vote. • U.S. Senate passes (64-35) 12-month SGR “patch.” April 2014 • President signs 12-month SGR “patch.” November-December 2014 • Members of GOP “Doc Caucus” urge leaders to address SGR repeal before adjourning the 113th Congress. • Congress passes “Cromnibus” bill without inclusion of SGR repeal provisions. 114th Congress January 2015 • House E&C Committee’s Subcommittee on Health holds two-day hearing to discuss possible offsets for permanent SGR repeal. February 2015 • CBO increases its estimate of SGR repeal to $177B. • Senate Finance Committee Chairman Orrin Hatch (R-UT) announces that no SGR-related hearings will be held before the March 31 “patch” expires. March 2015 • March 10: Rumors of a possible deal on SGR repeal bill become more plausible. • March 13: Key House Committee (W&M and E&C) Chairmen confirm emerging SGR/CHIP reauthorization deal. • March 19: Rep. Mike Burgess, MD, (R-TX) introduces H.R. 1470, the SGR Repeal and Medicare Provider Payment Modernization Act of 2015. H.R. 1470 mirrors the bipartisan, bicameral policy agreement from the 113th Congress—H.R. 4015. • Additional Medicare reform provisions beyond SGR repeal are finalized by Speaker John Boehner and Minority Leader Nancy Pelosi. • March 24: Rep. Burgess is given the honor of introducing H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). • March 24: The GOP “Doc Caucus” sends H.R. 2 support letter to leadership. • March 25: The AAO-HNS sends H.R. 2 support letter to members of the House. • March 25: The White House signals its support of H.R. 2. • March 26: The AAO-HNS sends H.R. 2 support letter to members of the Senate. • March 26: The House passes H.R. 2 in an overwhelming bipartisan vote of 392-37. • March 27: Unable to “fast-track” its consideration of H.R. 2, the Senate delays voting on H.R. 2 until after its two-week spring recess. • March 27: CMS instructs its carriers to “hold” for 10 business days any Medicare claims for services submitted on or after April 1, when the current “patch” expires. The hold means April claims will be held through Tuesday, April 14. April 2015 • April 9: Sen. Ron Wyden, top Democrat on the Senate Finance Committee, announces his support for H.R. 2. • April 14: Senate leaders reach deal to vote on H.R. 2, including consideration of six amendments. • April 14: All six Senate amendments to H.R. 2 fail, and the Senate passes the bill in a bipartisan vote of 92-8. • April 16: President Barack Obama signs H.R. 2 into law.
The physician community has reason to celebrate. On April 16, President Obama signed into law H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). In one swoop, H.R. 2—perhaps the most critical piece of health-related legislation since the Affordable Care Act—delivered to the physician community not one, but several legislative victories.
Most notably, of course, are the provisions to permanently repeal the flawed Sustainable Growth Rate (SGR) formula used to determine payments to physicians under the Medicare program. Repealing the SGR has long been a top legislative priority for the AAO-HNS and others in the physician community. In fact, it took more than 14 years and laboring through 17 short-term payment “patches” to arrive at the policy agreements that coalesced in H.R. 2.
So, what does the bill do? In regard to Medicare physician payments, H.R. 2 stipulates:
- Immediate repeal of the SGR formula.
- A “period of stability” with a .5 percent increase in physician payments for five years.
- A 5 percent added incentive payment for physicians in new Alternative Payment Models (APMs).
- Increased funding for technical assistance to practices of 15 or fewer professionals.
- Creation of a technical advisory committee to review and recommend physician-developed APMs via an open comment process.
Other “victories” included in H.R. 2 are:
- Consolidation of three existing incentive programs (Physician Quality Reporting System, Value-Based Modifier, and Meaningful Use Electronic Health Records). Combining these programs via a new Merit-Based Incentive Payment System (MIPS) program will help to set performance thresholds and offer flexibility for specialties in achieving the necessary reporting requirements for bonus payments.
- Rescission of the new CMS policy to transition all 10- and 90-day global payment codes to 0-day codes by 2018.
Also noteworthy about H.R. 2 is the manner in which it was passed. In total, 484 lawmakers in both chambers voted in favor of the bill. Given that legislative gridlock and partisan bickering have become the norm on Capitol Hill, the bipartisanship achieved on H.R. 2 was surprising and refreshing.
For so long, the SGR issue has operated as a “vacuum” on Capitol Hill, often inhibiting work on other critical initiatives. In fact, it was frustration relating to the cyclical “doc fix” that led Congressional leaders, namely Speaker John Boehner and Minority Leader Nancy Pelosi, to—finally—begin private negotiations to permanently address the SGR issue.
In reality, the burst of activity to resolve the SGR issue this spring has been two years in the making (see timeline). Throughout the 113th Congress, leaders from the committees with jurisdiction over health issues in both the House and Senate worked in earnest (with the physician community) to craft the Medicare physician payment replacement policies that were ultimately included in H.R. 2. In addition to hearings, briefings, hill meetings, stakeholder sessions, and mark-ups, a key component to the evolution of the SGR replacement policies were myriad comment letters submitted by organizations across the healthcare spectrum. For example, in 2013, at the height of the policy development phase, the AAO-HNS alone submitted seven SGR-related comment letters.
With the SGR replacement policies in place by early 2014, efforts to advance the bill were thwarted by the question of how to pay for the measure. What changed? The answer is that Congressional leaders and rank-and-file lawmakers agreed to view the SGR formula as the budget gimmick it was. The track record for SGR patches was proof that Congress never intended to allow sweeping cuts to take place. So, why not finally fix the problem—even if it meant not funding the whole package. In the end, after substantial negotiations by party leaders, only the add-on provisions included in H.R. 2 (e.g., extension of the CHIP program) were paid for.
Next steps
Is the SGR replacement policy perfect? No. It is, however, a starting point. Now the AAO-HNS will work toward improving upon the foundation set forth in H.R. 2.
For more information regarding H.R. 2, and/or additional AAO-HNS federal legislative priorities, contact legfederal@entnet.org or visit www.entnet.org/advocacy.
TIMELINE OF SGR REPEAL ACTIVITIES
113th Congress
February 2013
• House Energy & Commerce (E&C) Committee holds hearing on SGR issue.
• House Ways & Means (W&M) Committee staff briefs physician community on development of SGR legislation.
• Congressional Budget Office (CBO) reduces cost estimate for SGR repeal.
May 2013
• House W&M holds hearing to collect information on potential reform proposals.
• Senate Finance Committee solicits feedback from physician community regarding future of fee-for-service system.
• House E&C briefs physician community on “framework” for SGR repeal legislation.
June 2013
• House E&C releases revised SGR framework.
July 2013
• House E&C holds mark-up of SGR bill and unanimously votes to advance the proposal.
October 2013
• Senate Finance and House W&M release legislative framework to repeal the SGR formula.
November 2013
• Staff for Senate Finance and House W&M brief physician community on legislative framework.
December 2013
• Senate Finance holds mark-up of SGR framework; approved by Committee.
• House W&M holds mark-up of SGR legislation; approved by Committee.
• Two-year budget deal signed into law; includes three-month SGR “patch.”
February 2014
• Bipartisan, bicameral legislation (H.R. 4015/S. 2000) to repeal the SGR formula and reform the Medicare physician payment system introduced in Congress.
March 2014
• H.R. 4015 passed by U.S. House of Representatives with partisan offset.
• U.S. House passes 12-month SGR “patch” via voice vote.
• U.S. Senate passes (64-35) 12-month SGR “patch.”
April 2014
• President signs 12-month SGR “patch.”
November-December 2014
• Members of GOP “Doc Caucus” urge leaders to address SGR repeal before adjourning the 113th Congress.
• Congress passes “Cromnibus” bill without inclusion of SGR repeal provisions.
114th Congress
January 2015
• House E&C Committee’s Subcommittee on Health holds two-day hearing to discuss possible offsets for permanent SGR repeal.
February 2015
• CBO increases its estimate of SGR repeal to $177B.
• Senate Finance Committee Chairman Orrin Hatch (R-UT) announces that no SGR-related hearings will be held before the March 31 “patch” expires.
March 2015
• March 10: Rumors of a possible deal on SGR repeal bill become more plausible.
• March 13: Key House Committee (W&M and E&C) Chairmen confirm emerging SGR/CHIP reauthorization deal.
• March 19: Rep. Mike Burgess, MD, (R-TX) introduces H.R. 1470, the SGR Repeal and Medicare Provider Payment Modernization Act of 2015. H.R. 1470 mirrors the bipartisan, bicameral policy agreement from the 113th Congress—H.R. 4015.
• Additional Medicare reform provisions beyond SGR repeal are finalized by Speaker John Boehner and Minority Leader Nancy Pelosi.
• March 24: Rep. Burgess is given the honor of introducing H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).
• March 24: The GOP “Doc Caucus” sends H.R. 2 support letter to leadership.
• March 25: The AAO-HNS sends H.R. 2 support letter to members of the House.
• March 25: The White House signals its support of H.R. 2.
• March 26: The AAO-HNS sends H.R. 2 support letter to members of the Senate.
• March 26: The House passes H.R. 2 in an overwhelming bipartisan vote of 392-37.
• March 27: Unable to “fast-track” its consideration of H.R. 2, the Senate delays voting on H.R. 2 until after its two-week spring recess.
• March 27: CMS instructs its carriers to “hold” for 10 business days any Medicare claims for services submitted on or after April 1, when the current “patch” expires. The hold means April claims will be held through Tuesday, April 14.
April 2015
• April 9: Sen. Ron Wyden, top Democrat on the Senate Finance Committee, announces his support for H.R. 2.
• April 14: Senate leaders reach deal to vote on H.R. 2, including consideration of six amendments.
• April 14: All six Senate amendments to H.R. 2 fail, and the Senate passes the bill in a bipartisan vote of 92-8.
• April 16: President Barack Obama signs H.R. 2 into law.