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Finance and Ways and Means Committees Release Revised SGR Legislation

December 6, 2013— The Senate Finance and House Ways and Means Committees Dec. 5 released modifications  to the bicameral, bipartisan discussion draft Medicare physician payment reform proposal that would repeal the sustainable growth rate (SGR) formula, freeze Medicare physician payments through 2023, and move toward a payment system that rewards quality over quantity [see Washington Highlights, Nov. 14].

The revisions address several areas of the discussion draft, notably regarding the value-based performance program (VBP), including the funding pool amount and maximum upside adjustment, as well as changes to alternative payment model (APM) participation.

In response to a recommendation in the AAMC Nov. 12 comment letter, the revised proposal lowers and gradually phases in the VBP funding pool penalty adjustment between 2017 and 2021.  As originally proposed, the penalties could total 8 percent in 2017 and increase each year until reaching 10 percent in 2020.  The penalties now will begin at four percent in 2017 and increase two percent each year until 2020 when they hit 10 percent.  Additionally, the VBP revisions include another AAMC recommendation to limit the total amount of physician payment at risk.

To encourage optimum APM participation, the revised proposal delays the APM participation bonuses period for one year until 2017 to allow professionals more time to prepare.  Additional revisions account for stakeholder concerns regarding the impact of retrospective determination of APM participation.  The committees created a new “partial qualifying APM participant” category, which will allow professionals that anticipated meeting APM participation thresholds but actually fell short to avoid penalties for failing to report VBP quality measures.

The Senate Finance Committee is scheduled to mark up the legislation on Dec. 12. Additionally, a recent statement from Ways and Means Chair Dave Camp (R-Mich.) acknowledged “the Committee has made real progress on a bipartisan and bicameral bill,” and, “[i]f that progress continues, I expect the Committee to consider the legislation before the end of next week.”  With Medicare physician payments set to be cut by over 24 percent on Jan. 1, House Majority Leader Eric Cantor (R-Va.) recently suggested that an SGR short-term patch may be considered on the floor sometime during the week of Dec. 9.

Len Marquez
Director, Government Relations
Telephone: 202-862-6281

Courtney Summers
Senior Legislative Analyst
Telephone: 202-862-6042


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806