Category Archives: Medicare

Congress Ends the Medicare Sustainable Growth Rate Formula and Begins Replacing the Fee For Service System

President Obama signed the Medicare Access and CHIP Reauthorization Act of 2015, on Thursday April 16. The Act repeals the long complained about Sustainable Growth Rate formula for computing Medicare reimbursement rates, which had resulted in the annual “Doc Fix” legislation for the last 17 years. The Act also begins the conversion from the Fee For Service system, which has been the way Medicare claims have been paid for 50 years, to a “value-based payment” system. The value-based payment system is designed to promote efficient care by shifting the burden and benefit of efficient care to physicians. There is much debate about the possible effects and side effects of the shift in payment.

The Act, known as MACRA, raises Medicare premiums on persons with incomes over $133,500 ($267,000 per couple), starting at 50% increases up to 80%. The willingness of Congress to index premiums to income in a bipartisan bill (it passed the Senate 92-8) is seen by many as a sign that compromise is possible on both long-term Medicare sustainability and in the event the Supreme Court uses the King v. Burwell case this summer to strike down portions of the Accountable
Care Act.

To gain a broader understanding of the Sustainable Growth Rate and Value-Based Payment impact of MACRA, please see the presentation linked here.  Recent Developments In Healthcare

John L. Moore
jmoore@williamsparker.com
941-329-6620

Bipartisan Medicare “Doc Fix” Compromise Legislation Released

The United States House Energy and Commerce and Ways and Means Committees and the Senate Finance Committee have released bipartisan compromise legislation that would
repeal the Sustainable Growth Rate (SGR) formula for physician payments and transition Medicare towards a value-based payment system.

The legislation “not only fully repeals the broken sustainable growth rate formal, but puts in place real reforms that move Medicare away from a fee-for-service model that promotes greater spending to one that encourages better results,” Sen. Orrin Hatch said in a press release announcing the legislative moves.

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