On December 12, 2013, the Senate Finance Committee and House Ways and Means Committee both approved legislation that would reform the Sustainable Growth Rate (SGR) formula currently used for Medicare physician payments.  There are differences in the House and Senate bills, and neither has been approved by the entire chamber in either the House or the Senate.  Presently, it is believed that the differences will be reconciled and a bill will be presented for the President’s signature in early January.   

The House bill, the Medicare Patient Access and Quality Improvement Act of 2013, was approved by the House Ways and Means Committee by a vote of 39-0. The bill provides a 0.5% update in the SGR from 2014 through 2016 and a 0% percent update for 2017 through 2023.  The Senate bill, the SGR Repeal and Medicare Beneficiary Access Improvement Act of 2013, maintains 2013 payment rates through 2023.  A Senate Finance Committee press release, available here, provides that the legislation accomplishes four main goals: (1) Repeals the SGR update mechanism and ties payments to quality and efficiency; (2) Improves the fee-for-service system by streamlining Medicare’s existing web of quality programs into one value-based performance program; (3) Incentivizes movement to alternative payment models; and (4) Makes Medicare more transparent by giving patients more access to information, and doctors data they can use to improve care. In addition, the Senate bill includes several amendments, one of which contains provisions of the Preventing and Reducing Improper Medicare and Medicaid Expenditures (PRIME) bill (S. 1123). The amendment would establish a series of requirements to enhance Medicare and Medicaid program integrity efforts.

Both bills combine current incentive programs into a single value-based incentive program (VBP). A Senate Finance Committee Summary, available here, states that the VBP streamlines and improves the Physician Quality Reporting System, Value-Based Modifier and meaningful use of EHRs.

The Senate bill is available here. The House version is available here.  Congressional staff will continue to modify these proposals before they are considered by the full House or Senate.