American Society of Hematology

Medicare Physician Payment Reform Bills Released by Congressional Committees

Published on: November 06, 2013

The Senate Finance Committee and House Ways and Means Committee jointly released their draft legislation to reform physician payment under Medicare on October 30. The Committees provided an eight page summary of the proposed bill and have asked ASH and other specialty societies to provide comments by November 12.

Briefly, the proposed legislation does the following:

  • Repeals the Sustainable Growth Rate (SGR) formula preventing a 24 percent cut in physician payment in 2014 and annual cuts thereafter.
  • Freezes the conversion factor (monetary index used to determine physician payment under the Medicare Physician Fee Schedule) for 10 years.
  • Starting in 2017, physician payments would be adjusted based on the physician's performance in a Value-Based Performance Payment Program (VBP). The VBP combines the existing Medicare quality programs - PQRS quality measure reporting, reporting of resource use measures such as those being developed under the existing Value-Based Modifier program, clinical practice improvement activities similar to those included in certified medical homes, and the Electronic Health Record – Meaningful Use requirements. Physicians would be given a composite score based on their participation in each of these programs. Since this is a budget-neutral program, physicians with high scores would get payment increases and those with low scores decreases. Physicians with few Medicare patients and those who get most of their revenue from an Alternative Payment Model (APM), such as an ACO, would be excluded from the VBP.
  • Encourages the development of and physician participation in Alternative Payment Models that involve two-sided financial risk and quality measure reporting. Physicians participating in APMs and patient-centered medical homes would receive a 5 percent bonus from 2016-2021.
  • Sets a target for identifying and revaluing misvalued services at 1 percent of the estimated amount in the MPFS in 2016, 2017, and 2018. This means that if the savings target is met (payment is reduced for services determined to be overvalued) the dollars would remain within the MPFS and would be redistributed in a budget-neutral manner. If the target isn't met the MPFS payments would be reduced by the difference between the target and the savings achieved.

The Committees' full summary can be found here.

ASH is very pleased to see that the repeal of the SGR included in the Committees' proposed bill, the 10 year freeze in fees and the 2017 start date for the combined value-based program are more problematic. ASH will submit a comment letter to the Committees thanking them for the SGR repeal while raising many of the concerns the Society has expressed related to similar reform measures. Please contact ASH Government Relations and Practice Manager Stephanie Kaplan with any comments you have about the proposed bill.

ASH has been a leading advocate over the past year urging Congress to repeal the SGR and replace it with a predictable, stable, and quality-based payment system for updating fees that fully and realistically account for the costs of operating a medical practice. Read more about ASH's ongoing advocacy efforts.

back to top