MedPAC Approves Recommendations to Congress Regarding SGR Repeal

October 18, 2011

MedPAC Approves Recommendations to Congress Regarding SGR Repeal

On Thursday, October 6th MedPAC voted to approve their recommendations to Congress concerning the repeal and replacement of the Sustainable Growth Rate (SGR).  If approved by Congress, the plan would create a 10-year freeze across all services and cost an estimated $300 billion.  Consequently, the new plan would require offsets which would result in significant cuts to specialty providers, including imaging professionals.

The four approved draft recommendations are as follows:

Draft Recommendation 1
The Congress should repeal the sustainable growth rate and replace it with a 10-year path of statutory fee schedule updates. This path is comprised of a freeze in current payment levels for primary care and for all other services, annual payment reductions of 5.9 percent for three years, followed by a freeze. The commission is offering a list of options for the Congress to consider if it decides to offset the cost of repealing the SGR system within the Medicare program. - Approved 15-2.

Draft Recommendation 2
The Congress should direct the Secretary to regularly collect data — including service volume and work time — to establish more accurate work and practice expense values. To help assess whether Medicare’s fees are adequate for efficient care delivery, the data should be collected from a cohort of efficient practices rather than a sample of all practices. The initial round of data collection should be completed within three years. - Approved 17-0.

Draft Recommendation 3
The Congress should direct the Secretary to identify overpriced fee-schedule services and reduce their RVUs accordingly. To fulfill this requirement, the secretary could use the data collected under the process in recommendation 2. These reductions should be budget neutral within the fee schedule. Starting in 2015, the Congress should specify that the RVU reductions should achieve an annual numeric goal — for each of five consecutive years — of at least 1 percent of fee-schedule spending. - Approved 16-1.

Draft Recommendation 4
Under the 10-year update path specified in draft recommendation 1, the secretary should increase the shared savings opportunity for physicians and health professionals who join or lead two-sided risk ACOs. The secretary should compute spending benchmarks for these ACOS using 2011 fee-schedule rates - Approved 15-1, with one abstention.

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MedPAC's SGR Presentation - October 2011