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Leadership Introduce Bipartisan SGR Repeal and Replacement Bill

Committee leaders in the House of Representatives introduced bipartisan legislation to repeal the sustainable growth rate (SGR) last Thursday. The “SGR Repeal and Medicare Provider Payment Modernization Act of 2015’’(H.R. 1470) contains over 150 pages of policy language, and is similar to the legislation passed by the House during the 113th Congress. The bill would repeal the SGR and institute a 0.5 percent annual payment update for five years while transitioning to a system that further incentivizes quality care. The proposal would incentivize providers to receive at least 25 percent of their revenue through alternative payments models (APMs) by 2019 to 2020, with the threshold percentage of revenue increasing over time. H.R. 1470 would consolidate the three existing Medicare quality programs-- the Physician Quality Reporting System (PQRS), the Electronic Health Record (EHR) Meaningful Use Program, and the Physician Value-Based Payment Modifier—into one-value based performance program and replace the current schedule of penalties with less severe payment adjustments. The proposal would also expand access to Medicare data by allowing qualified entities (QEs) to provide analyses to providers and professional societies to assist with quality improvement activities and the development of APMs. Qualified clinical data registries also would be able to purchase claims data for purposes of quality improvement and patient safety. To ensure more achievable quality gains, it would also require EHR interoperability by 2018. The introduced SGR replacement package would extend funding for the Children’s Health Insurance Program (CHIP) for two years. CHIP funding is scheduled to expire in September. The replacement plan would only be partially paid for, and leadership is trying to convince conservative members that long-term savings from structural entitlement spending reform will make up for the short-term cost of the bill. The legislation will offset $70 billion of the bill’s $210 billion total cost over the next decade. Half of this $70 billion will come from structural Medicare reforms through additional beneficiary means testing, limiting first dollar coverage of supplemental Medigap plans for future beneficiaries, and reducing annual updates to hospitals and acute-care providers. The added means testing would impact approximately 2 percent of seniors by increasing premiums for single seniors making more than $133,000 and married couples making more than $267,000. The portion of their premium share this cohort would expect to pay would increase from 50 percent to 65 percent. Single beneficiaries with an income greater than $160,000 or married beneficiaries with an income greater than $320,000 would see their premium share increase from 65 percent to 75 percent of costs. For low-income seniors, the plan would extend a program helping those between 120 percent and 135 percent of the federal poverty line pay for their Part B premium for physician care. Senate Democrats are expected to push for a four-year reauthorization of CHIP rather than the proposed two-year reauthorization in the House bill. Over the weekend, Democratic members of the Senate Finance Committee released a joint statement on the SGR repeal negotiations, noting that a clean four-year reauthorization of the CHIP program would go a long way toward achieving bipartisan support. The statement also urged members of the House to make permanent the health extenders and to consider more balanced offsets that do not increase costs to beneficiaries. Speaker of the House John Boehner (R-Ohio) and Minority Leader Nancy Pelosi (D-Calif.), who led negotiations in crafting the repeal legislation, expressed optimism that the proposal would have enough bipartisan support to pass this Congress. Chairman of the House Energy and Commerce Committee Fred Upton (R-Mich.) has said that the legislation will receive a stand-alone vote, and Health Subcommittee Chairman Joe Pitts (R-Pa.) has said that it will be brought to the floor after the House considers the fiscal year 2016 budget proposal. Rep. Pitts also noted that lawmakers are not working on a short-term patch as a contingency plan. Physicians will see a 21 percent cut in reimbursements on April 1 without passage of the SGR replacement plan or a short-term doc fix. The Energy and Commerce Committee has compiled a one-page summary of H.R. 1470, a section-by-section, and a working summary of the SGR package.

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