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Congress Reaches Agreement on SGR Repeal Accompanied by a Streamlined Value-based Payment Program for Providers | Avalere Health
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Feb 12, 2014

Congress Reaches Agreement on SGR Repeal Accompanied by a Streamlined Value-based Payment Program for Providers

Published

Feb 12, 2014

On Feb. 6, House and Senate negotiators reached an agreement to permanently repeal Medicare’s SGR formula and replace it with a system focused on quality, value, and accountability.

The agreement includes a 0.5 percent increase in provider (physicians, physician assistants, nurse practitioners, etc.) payments for 5 years, and establishes a “Merit-Based Incentive Payment System (MIPS)” to begin in 2018.  MIPS will consolidate the PQRS, the Value-Based Payment Modifier and Meaningful Use programs into one program, rewarding providers based on scores across four areas: 1) quality measures, 2) resource use, 3) clinical quality improvement activities and 4) meaningful use.

This agreement allows for greater specialty society input on measures included in the overall “composite performance score” (CPS) for the MPIS, which determines provider payment after 2018.  Previously, CMS used the National Quality Forum (NQF) recommendations in their rulemaking process, with only minor input and consideration from these same societies, something which the program’s authors wanted to change.  Societies would now be able to identify and submit measures for consideration in the MIPS program, which HHS will publish annually. In addition, the agreement allows for consideration of measures that are not endorsed by a consensus-based entity (i.e. NQF), if the measures are evidence-based.

The SGR agreement places a significant value on the use of clinical data registries, such as those maintained by physician specialty societies.  Measures included in “qualified clinical data registries” will automatically be included in the first year of the MIPS program, and will remain in the program unless removed through regular rulemaking. The agreement also includes funding for measure development to fill gap areas ($15 million annually), and enables CMS to contract with Quality Improvement Organizations to provide guidance and assistance to participating providers.

If this SGR proposal is signed into law, providers will have a more substantial role in defining and measuring quality of care in their respective specialties. The law would also offer greater flexibility to demonstrate value, while simultaneously leveraging existing and/or future activities.  For example, certain providers already participating in alternative payment models (APMs) could be exempt from the MIPS assessment.

In addition, providers who receive a significant share of their revenues either from Medicare APMs or other APMs would receive a five percent bonus in 2018-2023. For 2024 and beyond, physicians participating in APMs would receive a 1 percent update to FFS payment, while those not participating would receive a 0.5 percent payment update. This is a reduction from previous draft legislation, which proposed a 2 percent and 1 percent update, respectively.

This bill also creates a Payment Model Technical Advisory Committee (TAC) to evaluate physician-focused payment models, including specialty specific models.  The 11 member committee will include no more than five provider/supplier representatives and no federal employees.  Finally, the law would lessen the data collection and reporting burden on providers to the favor of many provider groups, including the AMA, who fully support this proposal.

HHS must address a couple of key issues first, in order to achieve full implementation of the law. Given that some quality measures used in the MIPS program may not undergo the traditional measure endorsement process, HHS and provider groups may have to establish a set of principles to ensure that measures are evidence-based, scientifically valid and feasible to implement. The law would also require HHS to submit the methodology for developing and selecting measures to a ‘specialty-appropriate’ peer reviewed journal before including such measures in the program. The process for selecting the appropriate journal, establishing scientifically sound measure development and selection methodologies and meeting each journal’s submission criteria and timelines, will present a number of challenges to HHS.

To read the draft SGR bill, click here.

To read the Senate Finance Committee’s one page bill summary, click here.

For more information about SGR or VBP, contact Dayo Jagun at DJagun@Avalere.com.

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