Center for Improving Value in Health Care
Mar 11, 2014 | 0 comments | Posted by Erin Perry
Health Reform, Payment Reform, Data, Decision, Health, payer, Readmissions, Care Transitions
This piece was originally featured in the Healthy Transitions Colorado March newsletter.
There has been a lot of buzz lately about the “doc fix” or the proposed repeal of the Medicare Sustainable Growth Rate formula (SGR). The SGR was put into law in 1997 as part of an attempt to regulate Medicare spending and essentially linked physician Medicare reimbursement to an economic target. The formula turned out to be rather quirky and soon resulted in proposed reimbursement cuts of more than 5 percent per year. To counter unsustainable cuts to reimbursement levels, Congress began periodically issuing temporary fixes to postpone the cuts and maintain physician reimbursement levels. Over time, the cuts dictated by the SGR have continued to grow and this past January physicians were looking at a potential cut in Medicare reimbursement of more than 20 percent.
This year a temporary patch was put in place to once more delay the prescribed reimbursement cuts, but an effort is underway to permanently fix and completely repeal the SGR. In February, three bipartisan committees proposed the SGR Repeal and Medicare Provider Payment Modernization Act (Act). The Act is designed to repeal the SGR and replace it with a new system focused on value and quality. A critical part of the Act also incentivizes movement to alternative payment models as a means of supporting value-based care, rather than the current volume-based fee-for-service system. The Act also promotes the use of Medicare data to improve transparency and overall quality.
So, what does this mean for readmissions and care transitions? Obviously, we can’t say with any certainty exactly what will happen, but there are several components of the legislation that strongly support care coordination and continuing work on improved care transitions and reducing readmissions:
The next months are going to be very interesting as Congress contemplates the proposed changes to the SGR. As of today, there is no set funding to finance the SGR repeal. There have been several proposals, but nothing has been decided or fixed. Given the bipartisan nature of the legislation and the strong support from various sectors, the Act is could potentially pass regardless of the funding situation. For now we’ll have to wait and see what the final results mean for health care, care transitions and readmissions.
For more information:
(PDF of Act) http://www.ama-assn.org/resources/doc/washington/sgr-bill-sections-summary-02-04-2014.pdf
About the Author: Kristin Paulson is CIVHC's Senior Manager of Policy and Initiatives. Contact her at firstname.lastname@example.org.
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