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Negotiators Reveal Bipartisan Proposal to Repeal and Replace the Physician Payment Formula

Posted on 2/7/2014 by NTOCC ®

Yesterday, Congressional negotiators in the House and Senate unveiled a bipartisan agreement on the framework for a repeal of the current Medicare physician payments Sustainable Growth Rate (SGR) formula, which will avoid a 27% cut in Medicare payments to physicians set to go into effect on March 31st. The agreement includes a 0.5% payment update for physicians for five years before transitioning to an alternative payment model structure. The proposal is expected to cost about $126 billion over 10 years.

In light of Finance Committee Chairman Max Baucus’ (D-MT) departure pending his confirmation as the ambassador of China, staff and members have been pushing to quickly come to an agreement on the policy of the proposal; however, there have been no agreements yet on how to pay for this bill- a discussion that will prove to be even more contentious than the underlying policy.

Of particular note for NTOCC, is that the section-by-section summary of the proposal includes policies which incentivize care coordination efforts for patients with chronic care needs.  Specifically, the summary states:

            Sec. 4. Encouraging Care Management for Individuals with Chronic Care Needs

In order to encourage the management of care for individuals with chronic conditions, at least one payment code for care management services will be established for professionals treating such individuals. Payment for such services will be made to professionals practicing in a patient-centered medical home or comparable specialty practice certified by an organization(s) recognized by the Secretary. In order to prevent duplicative payments, only one professional or group practice will receive payment for these services provided to an individual during a specified period. Payment for these codes will be budget-neutral within the physician fee schedule. Finally, payments for chronic care management would not require that an annual wellness visit or an initial preventive physician examination be furnished as a condition of payment.

While full legislative language is not yet available, NTOCC staff will be looking into this proposal closely.