American College Of Surgeons - Inspiring Quality: Highest Standards, Better Outcomes

Medicare Physician Payment

Sustainable Growth Rate

Key Provisions of the Medicare Access and CHIP Reauthorization Act

  • Full and permanent repeal of the broken sustainable growth rate (SGR) formula used to calculate Medicare physician payments
  • Annual positive updates of 0.5 percent from July 2015 to 2019
  • Maintenance of fee-for-service as a payment option
  • Elimination of current-law penalties from the existing quality programs, such as the Physician Quality Reporting System (PQRS), Electronic Health Record (EHR) Meaningful-Use Program and the Value-Based Modifier (VBM) Program in 2019, and combining these programs into a single Merit-Based Incentive Payment System (MIPS). The merit-based program would be based on physicians achieving a threshold, or benchmark. Such a system makes it possible for all providers who reach these quality benchmarks to achieve positive incentives or payment updates
  • Incentives to move into advanced alternative-payment models (APMs), including 5 percent bonus payments from 2019 to 2024, and exemption from some other reporting requirements
  • Inclusion of appropriate pathways for surgeons to develop, test, and participate in APMs, such as the Clinical Affinity Groups (CAGs) in ACS’s Value-Based Update (VBU) proposal
  • Prohibits CMS from implementing its plan to transition 10- and 90-day global payments to 0-day global payments
  • Clarification that no standard or guideline created under federal health programs shall be construed as setting the standard of care for purposes of malpractice claims.

Frequently Asked Questions

2014 Efforts

SGR Champions Continue to Show Bipartisan Support to Pass Long-Term Fix to SGR
Three letters have been sent to House leadership urging Speaker Boehner, Majority Leader McCarthy and Minority Leader Pelosi to address the issue in the lame duck session. On October 29, 17 members of the Pennsylvania congressional delegation sent a letter urging action. This was soon followed on November 3 by a letter signed by all 19 members of the GOP Doctors Caucus urging that all efforts be taken to enact ACS supported legislation, H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act. Finally, on November 6, a letter led by Representatives Kurt Schrader (D-OR) and Reid Ribble (R-WI) signed by 114 Members of the House of Representatives was sent to the Speaker and Minority leader. All told, when combined with those who signed a letter last year led by Representatives Bill Flores (R-TX) and Dan Maffei (D-NY) more than 285 Members of Congress have expressed, in writing, their support to permanently repeal the SGR by the end of the current Congress.

ACS and Other Surgical Groups Send Letter to Congress Opposing a Medicare SGR Short-Term Patch
On March 26, the American College of Surgeons (ACS) and other physician groups sent a letter to Congress opposing the Protecting Access to Medicare Act of 2014, which seeks to patch the Medicare physician payment system for 12 months.

ACS and Other Physician Groups Send Letter to Congress Supporting SGR Legislation H.R. 4015/S. 2000
On February 18, the ACS and other physician groups signed a letter in support of SGR Legislation H.R. 4015/S. 2000 to avert a 23.7 percent cut to Medicare physician payments scheduled to take effect April 1.

ACS Expresses Strong Support for the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (H.R. 4015/S.2000)
On February 7, the ACS wrote to Congressional leaders expressing strong support for S.2000/H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act of 2014. ACS believes this legislation properly aligns incentives and secures patient access to high-quality surgical care.

2013 Efforts

ACS and Other Surgical Groups Oppose Proposal to Repeal the SGR
On December 10–11, the ACS and other surgical groups submitted joint letters to the Senate Finance Committee and the House Ways and Means Committee opposing a bipartisan, bicameral legislative proposal to permanently repeal the sustainable growth rate (SGR) formula and reform the Medicare physician payment system. Aspects of the proposal (issued October 30 with subsequent revisions in November) call for a 10-year physician payment freeze and provide inadequate incentives for providing value-based care.

Strong Advocacy Efforts Lead to Bipartisan Support to Pass Long-Term Fix to SGR
Following strong advocacy efforts from staff in the ACS Division of Advocacy and Health policy at the College, U.S. Reps Dan Maffei (D-NY) and Bill Flores (R-TX) announced November 22 bipartisan support to urge congressional leaders to pass a long-term fix to the Medicare SGR formula for physician payments. Representatives Flores and Maffei spearheaded a bipartisan letter signed by 259 members of Congress to House Speaker John Boehner and House Democratic Leader Nancy Pelosi requesting enactment of fiscally responsible reforms to the Medicare physician payment system.

ACS Responds to Proposal to Repeal the SGR
On October 30, 2013, the Senate Finance and the House Ways and Means committees released a bipartisan, bicameral draft proposal for repealing Medicare's flawed sustainable growth rate (SGR) formula and fixing the Medicare physician payment system. The proposal builds on draft legislation that the House Energy and Commerce Committee approved this summer. For more than a decade, the ACS has sought a long-term solution to the SGR problem and advocated for building an improved Medicare physician payment system.

ACS Responds to Senate Finance Committee Questions
On May 31, ACS sent a letter to the Senate Committee on Finance to respond to questions posed by the committee on overhauling the Medicare physician payment system. ACS focused on policies that could be implemented during this five-year period of stability.

ACS Responses to SGR Proposal
ACS Responds to Joint proposal from U.S. Ways and Means Committee and U.S. Energy and Commerce Committee concerning reforming the Medicare physician payment system and its sustainable growth rate formula.

July 2013 | June 2013 | April 2013 | February 2013 | October 2012

Resources

Statements Before Congress

What Is Sequestration?

Medicare Participation Status Information

Stark Law

Preservation of the in-office ancillary services exception (IOASE) to the “Stark” law and rejection of a proposal to restrict the IOASE for advanced imaging, radiation therapy, anatomic pathology, and physical therapy. View letters to the following congressional committees: Energy & Commerce, Finance, and Ways & Means.

The ACS supports the halt legislation that may provide audiologists with unlimited direct access to Medicare patients without a physician referral. H.R. 4035 and S. 2046 inappropriately provides audiologists with unlimited direct access to Medicare patients without a physician referral.

ACS Signs Joint Letter in Opposition to H.R. 2914
The American College of Surgeons (ACS) along with more than 30 other health organizations sent a letter in opposition to recently introduced legislation that would limit access to in-office services provided by physicians. The letter, sent to all members of Congress, urges opposition to H.R. 2914, the Promoting Integrity in Medicare Act, which would eliminate the in-office ancillary services exception (IOASE) to the Stark self-referral law. The IOASE allows physicians to provide certain services including advanced diagnostic imaging (MRI, PET, and CT scans), radiation therapy, anatomic pathology, and physical therapy, with certain requirements and restrictions. The ACS maintains that the U.S. health care system must ease the coordination of care to patients, especially those with complex conditions. Eliminating the IOASE would make this more difficult.

Independent Payment Advisory Board

ACS Supports Repeal of Independent Payment Advisory Board (IPAB)
On February 20, 2013, the American College of Surgeons sent letters to the House and Senate in support of the “Protecting Seniors' Access to Medicare Act” (H.R. 351), and continued opposition to the Independent Payment Advisory Board (IPAB).

Relative Value Update Committee

Importance of the RUC Addressed
ACS and 46 other organizations sent a letter to members of the House of Representatives regarding the importance of the Relative Value Update Committee (RUC) and to address any misconceptions about its composition or role.

Misvalued Physician Service Codes

The most recent one-year SGR formula patch included the misvalued services provision that was part of the larger SGR Repeal Act. The legislation allows the HHS Secretary to revise payments for potentially misvalued codes within the physician fee schedule based on information collected from providers:

  • Policy applies to fee schedule for years 2017–2020.
  • Target for value reduction is 0.5 percent of the estimated amount of total fee schedule expenditures for the given year.
  • If the total relative value unit for an identified misvalued code is scheduled to be reduced by 20 percent or greater due to the reevaluation, the adjustment must be phased in over two years.

The College has long opposed this provision, noting that the American Medical Association’s Relative Value Update Committee (RUC) and the Centers for Medicare & Medicaid Services (CMS) have been working for the past number of years to revalue all codes, work that is expected to continue through 2016. There are early discussions among the larger national physician organizations to move the provision’s start date to 2015. The rationale is to get credit for the RUC/CMS revaluation work over the next two years, which will include cuts to physician service codes. There are concerns that once the RUC/CMS project is complete; there will not be any codes that are overvalued making it hard to reach the 0.5 percent target that would start in 2017. Yet, the law would require those cuts to occur putting all codes, particularly specialty codes, at even more risk.

The risk in moving the target date to 2015 is that it wipes out the three years that the physician community could seek the repeal of the provision. However, repeal is a long shot as this provision was included in the SGR Repeal Act and SGR Patch on a bipartisan/bicameral basis.