The Medicare Physician Payment Innovation Act of 2012: Phased Testing and Incorporation of Delivery and Payment Models

New payment and delivery models will be tested and implemented in phases. Health care providers will be allowed to participation in the design and inception of new health care payment systems, which will be tested in at least 3 geographic regions of the country- an increase from that mandated by prior legislation in Subsection (d) of section 1848 of the Social Security Act.[1] [2] [3] Provisions for the incorporation of payment model physician implementation will be included, as well. Furthermore, the General Accounting Office (GAO) will evaluate the model systems and confer the report to Congress by April 2016. The program is flexible in that accommodations can be made by the Comptroller General to revise models systems for use by small and rural health care practices. The Secretary of Health and Human Services, at his/her discretion, may choose to select and implement an alternative payment delivery model. All successful models must be made available for publication by October 2016. After this time, the Secretary of Health and Human Services may disseminate information to health care providers regarding the successful implementation of these health care payment models so that usage may begin by January 2017. This, proposed legislation might be a response to current activity in the medical professional community, as Dr. Hoven also stated in her congressional testimony that physicians had already begun transitioning to alternative health care delivery payment models outside of congressional legislative efforts to have them do so.[4]

Changes in 2018 / Encouraging High-Value, High Quality Care Through the Use of Payment Incentives

Significant reductions in health care expenditures can be achieved through improving the efficiency and quality of the medical care rendered in this nation. Wasteful spending has been attributed to rising medical costs for several years, as the costs of medical errors, failure to transition to electronic health records to assure the uninterrupted transfer of patient information among providers, lack of consistency in care standards, and many other factors drive up the cost of health care. Furthermore, doctors are not rewarded for delivering high-quality care and, instead, are compensated for high patient volume, instead. This is often detrimental to the delivery of high-quality care. Thus, physicians lack incentives to do so. H.R. 5707 has planned for budgetary considerations of $720 million to incentivize quality care. Beginning in 2019, protection from reimbursement reductions will be conferred upon health care providers who employ clinical care quality measures and meaningful use of electronic health records. Physicians who do not comply could face additional reimbursements cuts. Again, allowances will be made for health centers that are unable to comply due to logistical constraints. Statistically, the SGR conversion factor will be continually modified until it reaches 0% by the year 2023.[5]

The high priority of incentivizing physicians for offering quality care was communicated to the House Ways and Means Committee in July 2012 in a health subcommittee on SGR reform. Several witnesses, including health care group executives and physician representatives from medical professional organizations, testified on matters ranging from improving health care quality, increased use of evidence-based medicine, alternative payment models, and increased physician involvement in decision-making concerning physician payment structures.[6] [7] [8] [9]

Savings from Overseas Contingency and Related Activities

A popular idea promoted by a number of health advocacy groups on Capitol Hill in the winter and spring of 2012 was that of redirecting unused funds from overseas United States military conflicts-particularly the wars in Iraq and Afghanistan, to offset the SGR. This legislation proposes an initial $83 billion for this purpose in fiscal year 2013 followed by annual amounts of $50 billion in each year thereafter through 2021.[10] [11]

References

[1] Schwartz, Allyson Y. (PA-13). “H.R. 5707-Medicare Physician Payment Innovation Act of 2012.” Bill Summary and Status, All Information. 112th Congress (2011-2012). Thomas. 9 May 2012. Web. 19 October 2012. http://hdl.loc.gov/loc.uscongress/legislation.112hr5707

[2] “Social Security Act.” Section 1848 [42 U.S.C. 1395w–4]. Social Security Online. Website. Web. 12 December 2012. http://www.ssa.gov/OP_Home/ssact/title18/1848.htm.

[3] ” 42 U.S.C. § 1395w–4 – Payment for Physicians’ Services.” United States Code 2010 Edition. Print. U.S. Government Printing Office Website. Web. 12 December 2012. http://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/html/USCODE-2010-title42-      chap7-subchapXVIII-partB-sec1395w-4.htm

[4] Hoven, Ardis. “Medicare Physician Payment Policy: Perspectives from Physicians. Roundtable Discussion on Medicare Physician Payments: Perspectives from Physicians.” Senate Finance Committee Hearing. 11 July 2012. Web. 8 December 2012. http://www.finance.senate.gov/hearings/hearing/?id=07780ea7-5056-a032-524e-     aa685439ac2b

[5] Schwartz, Allyson Y. (PA-13). “H.R. 5707-Medicare Physician Payment Innovation Act of 2012.” Bill Summary and Status, All Information. 112th Congress (2011-2012). Thomas. 9 May 2012. Web. 19 October 2012. http://hdl.loc.gov/loc.uscongress/legislation.112hr5707

[6] Id.

[7] Mulvey, J; Hahn, J. “Medicare Physician Payment and the Sustainable Growth Rate (SGR) System.” Congressional Research Service. 2 August 2012. 1-21. Print. Web. 21 November 2012. usbudgetalert.com/CRS_SGR_Aug%202012.pdf

[8] Riddles, Lawrence M. “Physician Organization Efforts to Promote High Quality Care and Implications for Medicare Physician Payment Reform. Hearing on Physician Organization Efforts to Promote High Quality Care and Implications for Medicare Physician Payment Reform.” House Ways and Means Committee Hearing. 24 July 2012. Web. 8 December 2012. http://waysandmeans.house.gov/uploadedfiles/riddles_testimony_final_7-24-12.pdf

[9] Bronson, David L. “Physician Organization Efforts to Promote High Quality Care. Hearing on Physician Organization Efforts to Promote High Quality Care and Implications for Medicare Physician Payment Reform.” House Ways and Means Committee. 24 July 2012. Web. 8 December 2012. http://waysandmeans.house.gov/calendar/eventsingle.aspx?EventID=303383

[10] Schwartz, Allyson Y. (PA-13). “H.R. 5707-Medicare Physician Payment Innovation Act of 2012.” Bill Summary and Status, All Information. 112th Congress (2011-2012). Thomas. 9 May 2012. Web. 19 October 2012. http://hdl.loc.gov/loc.uscongress/legislation.112hr5707

[11]   Mulvey, J; Hahn, J. “Medicare Physician Payment and the Sustainable Growth Rate (SGR) System.” Congressional Research Service. 2 August 2012. 1-21. Print. Web. 21 November 2012. usbudgetalert.com/CRS_SGR_Aug%202012.pdf

 

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