Legislation Introduced to Repeal SGR and Implement Physician Quality Improvement

July 28, 2005 – House Ways and Means Subcommittee on Health Chairperson Nancy Johnson (R-CT) introduced the “Medicare Value-Based Purchasing of Physicians’ Services Act of 2005” (HR 3617), which would prevent the Medicare payment cuts to physicians scheduled to begin on January 1, 2006, and begin to transition the program to value-based purchasing. Currently, Medicare is scheduled to cut physician reimbursements by 26% over the next six years – including a 4.3% cut in January 2006. More details about impending physician payment cuts and ASH’s advocacy effort to stop the cuts is available on the Advocacy Center.

Specifically, HR 3617 calls for a calendar year (CY) 2006 update to the Medicare Physician Fee Schedule of +1.5 percent. During 2007-2008, physicians who meet reporting requirements on performance would receive an update equal to the Medicare Economic Index (MEI) and physicians who do not report would receive an update of MEI minus 1 percent. During 2009 and after, physicians who meet reporting requirements on quality and efficiency measures would receive the MEI update and those who do not report would receive MEI minus 1 percent.

Under the bill’s provisions, the Secretary of Health and Human Services must provide for the selection of quality and efficiency measures, including outcome, process, and structural measures. Medical specialties must submit proposed measures (directly or through a physician-consensus building process) to a broader consensus building organization by March 1, 2006. If no measures are submitted or if measures are insufficient, the Secretary may submit measures by April 1, 2006. In other words, if specialty societies do not identify measures, CMS will impose its own. Public reporting of information would begin in 2009. Reporting would indicate whether the physician is new or had insufficient data to report on, or for any other physician, whether the physician met the performance objectives. In 2007 and 2008, reports would be provided to the physician only and an appeals process would allow the opportunity for review and comment on information concerning performance against the objectives. Further, HHS would be required to educate physicians and beneficiaries about the program in 2006 and must conduct annual reports on physician volume growth.