House Republicans Seek to Replace Medicare SGR

Republicans on the House of Representatives’ Energy and Commerce committee continued work on their plan to replace Medicare’s physician payment system. On Tuesday, they released the latest update to a bill that they hope to get passed by the end of the year.

The draft legislation would repeal Medicare’s current payment formula, the sustainable growth rate or SGR, and replace it with an enhanced fee-for-service system. Many experts say the fee-for-service system rewards the volume of services over value, but the lawmakers contend that the system in the legislation would “improved”.

The new system would allow doctors and medical specialty organizations to work with the Department of Health and Human Services (HHS) in developing quality measures for specific provider groups. Physicians would then be judged against those measures and receive incentive payments for good performance.  Providers could also choose to participate in approved alternative payment models, such as accountable care organizations, medical homes, or bundled payments.

The whole process would be guided by input from stakeholders, beginning with a hearing next week. The Health Subcommittee of the House Energy and Commerce Committee will be inviting stakeholders to testify at the hearing; the specific panel members have yet to be published. Should the law go into effect, HHS would be required to take stakeholder input into account when reviewing the incentive payment system each year.

The Senate Finance Committee has also held hearings on the topic, according to CQ, but they have no legislation introduced. You can view the House’s draft legislation here.