Medical Societies Answer Critics of SGR Repeal

April 16, 2015

Organized medicine is both applauding Congressional repeal of Medicare's sustainable growth rate (SGR) formula for physician reimbursement and defending the new payment system in its place.

The defense boils down to this: The new scheme may not be perfect, but it's better than the alternative. And Congress can be persuaded to improve it.

The bill passed by the Senate on Tuesday and signed by President Barack Obama today eliminates a 21% pay cut that technically took effect April 1. But many physicians are dismayed by the prospect of inflation-trailing 0.5% rate hikes each year through 2019 under the bill, called the Medicare Access and CHIP Reauthorization Act (MACRA). And based on their experiences with Medicare incentive programs such as meaningful use of electronic health record (EHR) systems, these same critics distrust the bill's pay-for-performance programs that debut in 2019 and allow physicians to earn bonuses and lump-sum payments.

The measure also received a dismal prognosis on April 9 from the Centers for Medicare & Medicaid Services (CMS). The report from CMS Chief Actuary Paul Spitalnic said that annual increases in fee-for-service rates stipulated in MACRA will not keep pace with growth in practice expenses, a situation made worse when the bill's pay-for-performance money runs out after 2024. Spitalnic wrote that by 2048, Medicare fee-for-service rates will be worse than if the 21% pay cut had taken effect.

Robert Wah, MD, president of the American Medical Association (AMA), dismissed the CMS report in a news release last week as an argument for the status quo that is "illogical, flawed and dangerous for patient access to quality healthcare." The AMA counterattack continued Wednesday, albeit softened, during a news conference with James Madara, MD, AMA executive vice president and chief executive officer.

Provided that nothing changes over 10 or 25 years, "projections are sometimes useful," said Dr Madara. "That's interesting to know, but one does not make linear projections over periods of decades or more, and assume that's where we're going to end up."

Robert Wergin, MD, president of the American Academy of Family Physicians, called the CMS report "discouraging," but said that its predictions "are a long way off."

"In the political world, a year is an eternity," Dr Wergin told Medscape Medical News.

Like others in organized medicine, Dr Wergin expressed elation about the repeal of Medicare's SGR formula, passed in 1997 to curb spending on physician services. "No more cuts hanging over my head," he said, referring to fee-for-service rate reductions triggered by the formula that Congress had postponed 17 times since 2003.

He described the annual 0.5% raises through 2019 as "probably not" adequate, but still preferable to a 21% cut.

"Does this bill have everything we'd want as family doctors?" he said. "No. It's not Shangri-La."

However, as a political solution, MACRA stabilizes Medicare and assures physicians of a predictable stream of revenue, said Dr Wergin. Consequently, physicians won't be forced to close their doors to Medicare patients.

Christian Shalgian, director of advocacy and public policy at the American College of Surgeons (ACS), also called the 0.5% increase "not enough."

"It's better than the freezes, but we still need to address it," Shalgian told Medscape Medical News. His society will seek to improve MACRA as time goes by. "It's not a perfect bill."

The AMA takes the same position about the measure's malleability.

"This is not the bill we would have written ourselves," the association states in a MACRA FAQ on its website. "Nothing in this bill prevents us from advocating for future legislation."

Medical Societies Tick Off What They Like

In contrast to the remarks from Shalgian and Dr Wergin, most medical societies had nothing but good things to say in news releases on the passage of the SGR repeal bill.

"This is a historic day — the dark cloud over physician group practices has ended," said Halee Fischer-Wright, MD, president of the Medical Group Management Association.

A number of leaders in organized medicine highlighted how MACRA shifts Medicare from fee-for-service to pay-for-performance. "Seniors are now at the center of a new Medicare system that will reward physicians who provide the highest quality care to them," said Robert Juhasz, DO, president of the American Osteopathic Association, in a news release.

Similarly, medical societies such as the American College of Physicians and the American College of Rheumatology praised MACRA for combining three sometimes overlapping, sometimes conflicting Medicare incentive programs — those for EHR meaningful use, quality reporting, and the Value-Based Payment Modifier. The new incentive program is called the Merit-Based Incentive Payment System (MIPS).

The ACS's Christian Shalgian called attention to a MACRA provision that makes it less risky from a medical-liability standpoint to participate in MIPS or MACRA's other pay-for-performance program called Alternative Payment Models (APMs). The law states that any guidelines or standards spelled out in a federal healthcare law — such as quality metrics developed under MACRA — shall not be construed as a standard of care owed by a physician in a medical malpractice or product liability care.

Time to Leave Medicare, Says This Society

There was one medical society that did not rejoice when the Senate voted 92 to 8 on Tuesday night to pass MACRA.

The conservative-leaning Association of American Physicians and Surgeons (AAPS) said that MACRA ought to prompt physicians to bail out of Medicare, or what it has called "Medicare slavery" in the past.

"[MACRA] will result in an onerous, very costly Sustainable Global Rationing program, which will divert resources from medical care yet still not make the Medicare program solvent," AAPS said in a news release.

Besides criticizing the annual 0.5% rate hikes as paltry, AAPS Executive Director Jane Orient, MD, told Medscape Medical News that MACRA's pay-for-performance provisions are less about real medicine and more about "collecting metrics and denying care and managing your case mix so you have fewer sick patients" for the sake of better outcomes.

Dr Orient, an internist, expressed skepticism about a 5% bonus that physicians can earn under APMs. "What do you have to do to collect this?" she asked. "How much money do you have to spend? How much do you have to bend your practice?"

The government has a track record of making pay-for-performance requirements hard to meet, she said. "Physicians may think they're going to get more money, but that remains to be seen."

Another MACRA bone of contention for Dr Orient and other physicians is a provision that invites medical certification boards, along with other "stakeholders," to submit quality-of-care measures that Medicare might incorporate into its pay-for-performance programs. The American Board of Medical Specialties and constituent groups such as the American Board of Internal Medicine have recently come under blistering criticism from physicians who call their maintenance of certification (MOC) programs a waste of time and money.

In its FAQ on MACRA, the AMA states that some physicians mistakenly believe that the legislation requires physicians to participate in MOC. Dr Orient agreed that it's a myth. However, she said that nonparticipation nevertheless is "very dangerous…because you might not qualify for all these [payment] perks." MACRA, she added, is part and parcel of a movement to make MOC mandatory for professional licensure on the state level.

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