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POLICY WATCH: Finally, A Permanent Replacement for the SGR ‘Doc Fix’?

Shaw, Gina

doi: 10.1097/01.NT.0000444235.92837.16

Prospects for a permanent replacement to the Sustainable Growth Rate (SGR) formula under which physicians who treat Medicare patients are paid — a scheme that has proven to be anything but sustainable — look brighter than at any time in recent years, according to AAN experts. But is that good news for neurologists or not?

The SGR, originally created by the Balanced Budget Act of 1997, compares actual growth in spending on physician services to a cumulative target growth rate, which is linked to the gross domestic product (GDP). But since the cost of providing care to Medicare patients has, for well over a decade, consistently increased at a rate exceeding GDP growth, the SGR formula as written requires that payments to physicians who treat Medicare patients be cut. In 2002, that cut was supposed to be 5 percent; in succeeding years, the SGR-dictated cut grew larger and larger.

These cuts were obviously untenable and would have driven most, if not all, physicians out of the Medicare pool within a few years. So well over a dozen times since 2002, Congress has passed temporary “patch” bills commonly known as the “doc fix.” Last January, a “doc fix” patch staved off a 27-percent cut. These patches typically only last a few months, so multiple versions must be passed each year.

“Always having that axe over our neck is tough, and doing battle over it over and over again every year is unproductive,” said Elaine Jones, MD, a solo practitioner who owns Southern New England Neurology in Bristol, RI, and serves as chair of the AAN's Government Relations Committee.

But those battles may end this year, said AAN Legislative Counsel Mike Amery, Esq. Congress has set another deadline — this one, March 7 — before the next “doc fix” must be passed. The next fix may give them time to reconcile two variations of one Medicare payment formula bill (the Pathway for SGR Reform Act) that have both passed committees in the House and Senate.

“The House Energy and Commerce bill passed committee 51-0 last summer,” said Amery. “Then the Senate Finance Committee and the House Ways and Means Committee came up with an identical proposal. Ways and Means passed it as is, and the Senate Finance Committee made some amendments. They have to put those two bills together and come up with something that works by March 7.”



The House legislation establishes an annual increase in Medicare physician payments of 0.5 percent through 2016, while the Senate Finance Committee bill would freeze payments at current rates for the next ten years.

“I've talked with Energy and Commerce Committee members who like the bill they passed,” said Amery. “They are, I'm sure, willing to look at the other proposal but they like the one they've got. I'm really hopeful; I think we're closer to an agreement than we've ever been before, because we have bipartisan bills.”

But it's not a done deal yet, Amery cautions. “Congress has yet to identify offsets to the cost, which is the most likely thing to sink the bill. I think there is a decent chance that Congress will be able to agree to the final policy on a bipartisan basis. But this still means that it will have to come up with $110 billion over ten years, as well as any increased cost such as a positive update.”

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The Academy has also not yet thrown full support behind either of the bills. “There are definitely some issues that we want some more clarification on because the bills have been passed kind of quickly, without a lot of meat on details.”

For example, Amery pointed to new “complex chronic care management codes” established by the bills. “These are the codes, we've been told by staff and members of Congress, that will make things better for neurology. But as we look at them, they look a lot like primary care codes and I'm not sure that a lot of AAN members will bill those codes. A lot of how this will be implemented is being left to the regulatory agencies, which haven't necessarily treated neurology well in recent years.”

And the payment updates aren't exactly what physicians might have hoped for. “Neurologists are very concerned that a 0 percent update for ten years will just solidify the pain that's already out there,” Amery said. “The legislation is supposed to create alternative payment plans so that physicians will move away from fee-for-service and then that wouldn't matter so much, but we don't yet know how that will work.”

That uncertainty is a big concern for small practitioners like Dr. Jones. “They're changing the whole business model of how health care works without knowing that what we're going to get will be better, or if it will work at all,” Dr. Jones said. “As a small business, it's getting harder and harder to stay in practice. I can't have 0 percent updates for 10 years. This is so confusing and murky that it's tempting to hand it over to a big group and let them worry about it. I think we may end up losing the mom and pops.”

A 0.5 percent reimbursement rate for several years, along with the possibilities of bonuses and other formulas for increased reimbursement, would be more encouraging. “But I'm already doing meaningful use, and I've been doing the PQRS [Physician Quality Reporting System], and those are not great reimbursement numbers either. They're nice little bonuses, but it's not going to make up for lost revenue over 10 years,” said Dr. Jones.

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There have been some key successes for neurology in the current legislation, Amery noted. “There are a lot of incentives for improving quality of care, and a specific provision in all three bills allows for recognition of improvements in quality of life, where quality of health isn't going to improve. That's a key victory for neurology, where the patients often do not ‘get better.’ It's something that people don't think about if they're not neurologists, but when we talked about it with the members and their staffs, a light bulb went on.”

Changes like these are essential to actually reforming health care, not just health care financing. “We have diseases that are not fixable, but there are ways to improve people's lives and decrease their need for care,” said Dr. Jones. “With diseases like Alzheimer's, we put more and more of a burden on families and caregivers. If we can implement some systems to support them with our reimbursement models, we can keep people out of nursing homes and hospitals. That will have a huge impact on cost and quality of life.”

The AAN had less success with efforts to include a positive update for physicians who primarily bill evaluation and management (E&M) codes. “We would like to see a payment differential between physicians who primarily bill E&M codes, and those who are primarily procedural,” said Amery. “We argued that with both bills, but it's a heavy lift for members of Congress. There are a lot of physician specialties who have been strong for a long time who would not be in favor of that.”

“I'm thrilled that health care is moving toward change,” Dr. Jones said. “The system is broken and it needs to get fixed, but things are happening so quickly and it's not always clear what we should be doing. I'm optimistic and stressed at the same time.”

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•. The AAN Capitol Hill Report:
    •. AAN Public Policy Resources:
      •. The Pathway for SGR Reform Act:
        •. Neurology Today archive on health policy:
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