By Emily Ethridge, CQ Roll Call
November 21, 2013 -- The Senate Finance Committee will mark up its bill to replace how Medicare pays physicians on Dec. 12, less than three weeks before physicians would experience a 24 percent cut in payments.
The markup shows that committee leaders are forging ahead with their plan to pass a replacement bill this year, although time is running short. The Finance Committee and House Ways and Means Committee released a joint draft framework Oct. 31 that would repeal the current payment formula, known as the sustainable growth rate (SGR).
The House Ways and Means Committee, which gives three days' notice for markups, has not yet scheduled a markup, according to a committee aide.
To avoid having physician payments cut on Jan. 1, lawmakers need to pass some kind of bill. With the tight deadline, a temporary reimbursement patch is likely. Such a patch would buy lawmakers more time to work on the larger replacement measures.
The joint committee draft is based on a bill (HR 2810) that the House Energy and Commerce Committee approved unanimously in July. The two committees hope their joint proposal will offer a less-expensive alternative to the Energy and Commerce bill, which the Congressional Budget Office (CBO) found would cost $175.5 billion over 10 years.
Committee aides said lawmakers hoped to move the joint proposal through the regular legislative process. But time is running short to pass a bill this year.
Lawmakers also have yet to publicly agree on a way to pay the cost of any replacement bill, and the Finance Committee plans to consider offsets for the bill separately. The CBO found that repealing the SGR for 10 years would cost $139.1 billion, significantly lower than previous estimates. But lawmakers have clashed before on how to offset that cost.
During the Dec. 12 markup, the committee also will consider a package of several health-related provisions that expire each year, commonly known as the "Medicare extenders."
So far, reaction from provider groups and other stakeholders has been mostly positive. Everyone agrees the SGR needs to be repealed, but groups differ on the details. Some groups also said they needed more information on the joint draft framework.
The American Medical Association (AMA) praised the committees for their work, but stopped short of endorsing the proposals.
"Now is the time to move past the annual SGR crisis and toward a Medicare program that ensures access to high-quality and efficient health care for patients and a stable practice environment for physicians," said AMA President Ardis Hoven in a statement. AMA leaders and physician representatives visited lawmakers this week and lobbied for Medicare changes.
The Alliance of Specialty Medicine, which represents several specialist groups, voiced several concerns with the draft proposal, including its provision to freeze physician payments for 10 years. The group also said in a letter to committee leaders that they were concerned the framework's alternative payment model proposal ignores that the most widely tested proposals present challenges for specialists.
The Federation of American Hospitals called the proposal "a significant step" toward fixing Medicare's physician payment system and said hospital cuts should not be used as an offset.
Reid Blackwelder, president of the American Academy of Family Physicians, praised the draft proposal for encouraging physicians to build on the patient-centered medical-home model and other alternative payment models. He also provided several recommendations, including increasing financial assistance for individual physicians and small practices to help them participate in the new models.
The joint draft proposal would allow physicians to either stay in Medicare's traditional fee-for-service system or move to alternative payment models. Those who stayed in fee-for-service would have their payment rates frozen for 10 years, although they would be able to get incentive payments for participation in a comprehensive, value-based quality program.
That draft proposal would consolidate Medicare's three existing quality programs into a single, budget-neutral program that would give higher payments to doctors who provide high-quality, high-value care.
Physicians who receive a significant portion of their revenue from alternative payment models in which they assumed some financial risk would also be eligible for bonus payments. The models could include patient-centered medical homes, accountable care organizations and bundled payment models.
In 2016 and 2017, providers would need to receive at least 25 percent of their Medicare revenue through the alternative payment model to receive a 5 percent bonus. That threshold would increase over time. Those physicians also would be exempt from having their performance judged under the value-based quality program.