Ch..Ch..Ch..Changes: Bill Eliminates SGR, Most Quality Incentives and Introduces Payment for Performance

February 10th, 2014

There appears to be strong bipartisan support for a bill that repeals SGR and that

  • Provides for annual automatic payment updates of 0.5% for five years (2014 – 2018)
  • Discontinues automatic updates for five years, beginning in 2018
  • Consolidates the three existing Medicare quality programs into a single value-based incentive the Merit-based Incentive
  • Payment (MIP) Program
  • Provides for increased Medicare payments based upon score on a (MIP), beginning in 2018
  • Would resume annual automatic updates beginning in 2024. All providers would receive an update, but the amount of the automatic update would vary from .5% to 1%
  • Provides incentives, such as a 5% bonus to providers who receive a significant portion of their revenue from an APM, for providers to switch to alternative payment models (APMs)
  • Expands the availability of Medicare data to patients and certain qualified entities.

As predicted by experts that follow HHI trends, the legislation appears to be based on the Prometheus model.  The payment system will use four measures to determine a provider's "merit."  Although we do not yet know what weight each of the four measures will be afforded, IF the Prometheus model is followed, the goal will be to reward with higher payments providers that manage their patients in the most financially efficient way while maintaining the quality of care.

Reading the legislative history, Congress feels the incentives previously offered have not had the effects expected and instead of lowering the cost of healthcare, have driven it up.  Thus, the new payment methodology will be largely OUTCOMES based.

A section by section breakdown of the bill can be found here

To understand where the Prometheus model in healthcare delivery is leading our healthcare industry, visit:

In a sense, what is old will be new again.  The government will be less concerned about HOW a provider does his job, and more concerned about the effectiveness.

We have some changes coming!

Tags: SGR, MIP


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