Deadline for Approving SGR Reform Legislation Fast Approaching

Maybe it will really happen this time—but it’s best not to hold your breath.

The December 31 deadline is rapidly approaching for the repeal of Medicare’s sustainable growth rate (SGR) formula and avoiding an automatic 24.4% across-the-board reduction in physician payments in 2014. Legislators and physicians, including oncologists, are working at an increasingly fevered pace to set the groundwork for a fair and quality-based payment system to replace the SGR.

A positive sign was the House Energy and Commerce Committee’s unanimous approval in August of the Medicare Patient Access and Quality Improvement Act of 2013, which is meant to replace the SGR formula.

The next steps are House of Representatives and then Senate approval of the Act. This would allow for 5 or 10 years of stable Medicare payments starting next year, with reimbursement rates increasing by 0.5% every year. Subsequently, physicians would be able to choose the quality measures to which they will adhere, and have their payments adjusted based on how well they perform on those measures.

“We’ve been watching efforts toward SGR reform for almost 10 years now, and every time a deadline has come Congress has just punted it a little farther down the road,” said Jeffery Ward, MD, an oncologist practicing at the Swedish Cancer Institute, Edmonds, Washington, and immediate past chair of the Clinical Practice Committee of the American Society of Clinical Oncology (ASCO). “But the stars seem to be aligning such that reform may take place this time—they’ve actually been working within Congress and back and forth with medical societies and providers since March. So there is a desire and effort by Congress to fix this that we haven’t seen before.”

ASCO president Clifford Hudis, MD, is also cautiously optimistic that the SGR reform will move forward and remove the specter hanging over oncologists of a potentially huge income cut.

“This appears to be the best chance we’ve had in years to get some agreement and move forward,” Dr Hudis said in a telephone interview with Oncology Practice Management. “But it’s very complex. The legislation has to be approved by both the House and the Senate, where there are many competing views on it. And it’s also not clear which payment model for replacing fee-for-service is favored by the majority of oncologists. That’s why we’re testing several models in small pilot projects.”

SGR Reform Complexity a Two-Edged Sword

SGR was put in place in 1997. Its longevity is at least partially a testament to the unwieldiness of finding a replacement that satisfies most stakeholders.

Ironically, the very complexity of the reform process may ultimately be an asset in moving the ball through the goalposts this time, Dr Hudis noted.

“Because it’s such a very detailed policy, most people in the general public, and even many physicians, don’t completely understand it and so don’t care about it much—which may make it easier for lawmakers to come to agreement and pass the reform legislation,” he said.

Indeed, it is hard for anyone but a legal beagle to discern the most relevant details in the draft SGR bill released on May 28, 2013, by the House Committee on Ways and Means’ Subcommittee on Health and the Energy and Commerce Committee. The draft was based on an SGR reform framework released in early February (Overview of SGR Repeal and Reform Proposal. Available at

The legislators’ vision is that the reform would take place in 3 phases. The first step would be the repeal of the SGR and the freezing of physician reimbursement for several years. The intention is to allow doctors to ramp up their participation in quality-based payment programs by the time it fully goes into effect sometime between 2019 and 2024.

In the second phase, according to the framework document, “physician fee schedule payment updates will be based on performance on meaningful, physician-endorsed measures of care quality and participation in clinical improvement activities.”

During this period, quality measures and clinical improvement programs that medical societies have already been assiduously assembling will be segued into full and official use.

“This proposal will reduce the reporting burden on physician practices, override the current ineffective CMS [Centers for Medicare & Medicaid Services] quality-measurement programs, and align Medicare payment initiatives with private-payer initiatives,” the reform document posits.

In the third and final phase, doctors will earn additional reimbursement for increased efficiency.

Keeping Oncology Ahead of the Curve

In July, Dr Hudis provided the Energy and Commerce Committee with a detailed response to a series of questions posed by the committee. The committee’s goal was to determine what the various American medical societies believe is the way forward. Dr Hudis said that ASCO strongly supports using benchmarks to determine how well individual physicians are performing and, therefore, how much reimbursement they should receive. ASCO does not support a peer-to-peer system of comparison.

Dr Hudis also noted that ASCO’s Quality Oncology Practice Initiative (QOPI®) has a high uptake rate among oncologists and is, therefore, well positioned to be a centerpiece of oncologists’ involvement in the second phase of the payment-reform process.

QOPI was first offered to ASCO members in 2006; today, 850 practices and 1200 individual practice sites participate. In addition, the QOPI Certification Program was launched in 2010 to set a standard for acceptably high-quality care in oncology. Dr Hudis told Oncology Practice Management that officials at CMS have indicated that the QOPI and the QOPI Certification Program would be acceptable to them as quality measures in the second phase.

“So that means QOPI, which a lot of oncologists are already participating in, would serve double duty for them: as a means of satisfying both ASCO’s and CMS’ thresholds for acceptably high quality of care,” Dr Hudis stated.

Another leader consulted by Oncology Practice Management said the new payment system also should reward oncologists for participating in clinical trials designed to increase progression-free and overall survival, including phase 3 studies that are part of the National Cancer Institute’s Clinical Trials Cooperative Group Program.

“These changes in the metrics for payment would offer a unique opportunity to raise the bar on clinical trial enrollment—and also push insurers to pay for these trials since they are known to be associated with improved quality practices and improved outcomes,” said Sagar Lonial, MD, Professor and Vice Chair of Clinical Affairs, Department of Hematology and Medical Oncology, Winship Cancer Institute, Emory University, Atlanta, Georgia.

For his part, Dr Ward emphasized the importance of integrating QOPI into the electronic medical record of pilot programs for optimizing the value/cost/efficiency equation in oncology.

“You have to be able to measure quality seamlessly and robustly, incentivize physicians and patients to reduce resource use without compromising quality or care, and then incentivize them further to provide the most efficient use of resources,” Dr Ward said.

He points to a program being road-tested by oncologist-hematol­ogist and American Medical Assoc­iation Trustee Barbara McAneny, MD, Texas oncologist Ray Page, MD, and others. Armed with a $19.8-million grant from CMS, the team is exploring a way for private oncology practices to provide patients with cancer better care at lower cost.

Dr Hudis and Dr Ward have an intense and candid demeanor when discussing payment reform. This reflects the huge amount of time they and their colleagues have devoted to exploring the best options for the path forward—which, if chosen poorly, will mean years of continued uncertainty and, if selected wisely, will put oncology on solid footing for the foreseeable future.

“We spend a lot of time on this because central to our mission is the need to maintain access to the highest quality care for all patients—and payment reform has to support this key goal,” concluded Dr Hudis.

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