SGR Is Over: What’s Next for Providers?

June 2015, Vol 5, No 5

On April 14, 2015, after years of uncertainty and 17 short-term “doc fix” patches to prevent severe annual cuts to physician reimbursement payments, Congress approved the Medicare Access and CHIP Reauthorization Act (MACRA), bringing an end to the Medicare sustainable growth rate (SGR). This bipartisan, bicameral compromise will provide physicians with the predictability in payments needed to continue to provide high-quality cancer care, while transitioning over a 10-year period to a new Medicare reimbursement system.

MACRA establishes a new, dual-­track payment system, under which physicians must eventually participate in a merit-based incentive payment system or an alternative payment model system. It extends the Medicare physician reimbursement rate set by last year’s patch to June 2015, after which annual 0.5% increases to payment rates are established through 2019.

In 2020, a second 5-year phase begins, during which reimbursement rates remain flat. Before the start of this second phase, providers will need to choose between the merit-based incentive payment system and the alternative payment model system. Providers meeting the criteria for alternative payment model incentives will be excluded from participation in the merit-based system, and payments under the merit-based system will be subject to positive or negative adjustments based on performance. Providers will be evaluated on the following performance criteria:

  • Quality of care
  • Resource use
  • Clinical practice improvement activities
  • Use of electronic health records technology.
Providers participating in an alternative payment model will instead be eligible for annual lump-sum bonuses equaling 5% of the previous year’s payments upon achieving specified targets in transitioning from a fee-for-service model.

In 2026, automatic annual payment rate increases resume, with physicians participating in the merit-based system receiving 0.25% per year increases and those participating in an alternative payment model receiving 0.75% per year increases.

MACRA encourages the development of alternative payment models applicable to specialties and small practices, as well as models that align private-based and state-based payers. To this end, MACRA calls for the creation of a Payment Model Technical Advisory Committee that will recommend additional alternative payment models to the Centers for Medicare & Medicaid Services (CMS). The Center for Medicare and Medicaid Innovation’s Oncol­ogy Care Model initiative already provides a venue for many cancer providers to participate in an alternative payment model. Going forward, the Association of Community Cancer Centers will vigilantly monitor recommendations of the Payment Model Technical Advisory Committee for other alternative payment models that may be relevant to oncology practices.

Through 2019, CMS will be going through a regulatory process to further define the merit-based program. We expect to see proposed rules revealed as soon as this summer or fall. There will be multiple rule-making cycles over the next 3 years, and the Association of Community Cancer Centers will monitor this process and provide comments when appropriate. MACRA also provides medical specialty societies and physicians an opportunity to develop and submit to CMS quality measures for the merit-based system that are appropriate to their specialty. Although the details of this submission process are still being determined, we will ensure that the voices of oncology care providers and community cancer centers are heard.

MACRA’s intent is not to derail current efforts in moving toward a value-based system, but to amplify them and provide incentives for practices moving in that direction. The Association of Community Cancer Centers looks forward to working with our members to effectively implement the bill and transition toward a new future for physician reimbursement.

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