ANOTHER SGR “FIX”?

In recent years we have been faced with at least a yearly crisis over Sustainable Growth Rate (SGR) mandated cuts in Medicare payments for doctors.

Physicians are normally paid on a fee for service basis as opposed to the bundled service model used for many other services provided under Medicare.  Usually when a physician’s services are bundled, it is with a hospital based or ACO model.  Therefore, the SGR formal based spending limits tend to have a higher impact on physicians.

This year the SGR based reduction would amount to 24.4% unless the SGR formula is modified or another annual “fix” is mandated by Congress.  It appears that this year may be somewhat different as discussions are underway to develop a new reimbursement system that awards physicians for improvements in efficiency and quality of care.  This would be a welcomed change from the series of one year stop gap measures if the newly developed formula provides adequate base payments to physicians for quality care, and then provides incentives for efficiency.

The devil, as ever, is in the details since simplistic performance measuring metrics often do not take into account the differences in patient populations, resources, etc.  A simple analogy is the difference between a physician servicing a healthy population base with many other specialty physicians available and quality hospitals compared to a physician who may face an unhealthy population with few resources in some rural areas.  (Obviously, in this example it could be the rural and city populations could be reversed with regard to healthiness).

The other problem is that given the thousands of discreet service codes under the SGR related formulas, determining healthy outcomes.

Most of the new proposals are forward looking, provide a period of stability for reimbursement levels, and provide some incentives for physicians willing to be early participants in alternative delivery systems, followed by reductions in payments made to physicians who do not meet whatever metrics are imposed for value or efficiency.  The costs of the proposals now pending exceed 100 Billion Dollars over 10 years, a staggering amount.  All of these proposals will have profound effects on primary care physicians and specialists who remain fee for service physicians.

BACK ISSUES

This is the 39^th issue of Jones • Wallace Healthcare Law News.  Many, if not all, of the Healthcare Law News are available on our website, www.joneswallace.com.  You are welcome to visit, read and print any of the back issues of our newsletter.  We also welcome any suggestions for improvement or subjects.

HAPPY HOLIDAYS!

We thank all of our clients and friends for their interest in healthcare law and in our Newsletter.  We hope everyone enjoys good health and appreciates the quality of physicians, nurses, hospitals and clinics we have available in our area.  Please have the happiest, safest and warmest of holidays.

This newsletter is edited by Paul Wallace of Jones • Wallace, LLC, a member of the American Bar Association Healthcare Law Section and the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years.  Mr. Wallace assists physicians in health practices in contract items, federal legal compliance, creation of practice entities, estate and wealth planning and similar issues.  Please feel free to call if you have any questions about this newsletter or any other matter at (812) 402-1600 or pwallace@joneswallace.com.