Premier on March 24 sent a letter to Congress in support of the Medicare Access and CHIP Reauthorization Act of 2015 (H.R. 2), which would repeal the sustainable growth rate (SGR) formula and phase in a new value-based system to pay physicians serving Medicare patients for the quality of care they provide. Although the bill disproportionately funds SGR reform by taking funds from hospital care for Medicare and Medicaid beneficiaries, a permanent solution to the flawed policy is preferable to the perpetual SGR ‘patches’ which have largely been offset by cuts to hospitals.
As reported last week, the bill would repeal the flawed SGR formula and replace it with a system that:
- Provides physicians with a 0.5 percent update over the next five years and freeze pay in fee-for-service for the next 5 years;
- Starting in 2019, replaces the current pay for performance programs in fee-for-service Medicare with a new “Merit-based Incentive Payment System” that starts with 4 percent and increases to 9 percent of physician pay that is at performance risk; and
- Also starting in 2019, pays a 5 percent bonus to physicians who participate in two-sided risk alternative payment models, such as ACOs.
Among other provisions, the bill would also:
- Extend the Children’s Health Insurance Program (CHIP) for two years;
- Extend expiring Medicare and Medicaid extenders for two years;
- Extend the delay of Medicare’s “two-midnight” rule until September 30, 2015;
- Permanently fund the Medicare Qualifying Individual program (which helps low income seniors with Part B premiums);
- Extend Tennessee DSH allotment through 2025; and
- Call for EHR interoperability and attestation by vendors and providers that they are not blocking data interoperability.
The package also includes two bipartisan Medicare bills:
- The Protecting Integrity in Medicare Act (HR 1021), which augments Medicare fraud and abuse policies
- Medicare DMEPOS Competitive Bidding Improvement Act (HR 284), which makes modifications to the Medicare durable medical equipment, prosthetics, orthotics, and supplies competitive acquisition program.
The policies that reduce the legislation’s cost include:
- DSH cuts: Delays the Medicaid DSH cuts until 2018 (currently scheduled to begin in FY2017) and extends the policy through 2025.
- Reductions to hospital updates: Phases in the 3.2 percent correction of the baseline inpatient payments needed in 2018 to prevent the documentation and coding adjustment from extending into perpetuity. Rather than correcting the base all at once in 2018, Congress would restore 0.5 percentage points per year over six years.
- Cuts to post-acute care market basket updates: Replace the market basket update in 2018 with a 1 percent update for long-term care hospitals, skilled nursing facilities, inpatient rehabilitation facilities, home health providers, and hospice providers.
- Increased Medicare beneficiary cost-sharing:
- Income-related premium adjustment: Starting in 2018, increase the percentage that beneficiaries pay toward their Part B and D premiums in two income brackets. For individuals with income between $133,501 and $160,000 ($267,001-$320,000 for a couple) the percent of premium paid increases from 50 percent to 65 percent. Those with income between $160,001 and above ($320,001 and above for a couple) would pay 80 percent.
- Medigap Reform: Limits first dollar coverage on certain Medigap plans by prohibiting plans from covering the Part B deductible for future retirees starting in 2020.
- Increase levy authority on payments to Medicare providers with delinquent tax debt: Increases the levy IRS is allowed to impose on tax delinquent Medicare service providers from up to 30 percent to up to 100 percent.