Success! The Medicare Sustainable Growth Rate Repealed

Medicare and budgeting issues have been at the forefront of many political campaigns, and some still believe the Sustainable Growth Rate (SGR) is the law of the land for Medicare. However, with the passage of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), as explained on Congress.gov, the SGR has been repealed. However, understanding what this means for healthcare providers and Medicare beneficiaries has not been clearly addressed. Let’s take a look at some of the details involved in the Medicare Sustainable Growth Rate.

What Is the Medicare Sustainable Growth Rate?

Image:Freedigitalphotos.net/cooldesign
Image:Freedigitalphotos.net/ cooldesign

The Medicare Sustainable Growth Rate refers to a formula to determine the payment to physicians for providing healthcare services to Medicare recipients. Over the past 12 years, the SGR has changed 17 times; however, the MACRA, passed on April 14, 2015, removes the use of SGR methodology from the annual conversion factor. Ultimately, MACRA reduces the chances of physicians withdrawing from Medicare participation due to lack of funding.

What Was the Goal of the Original “Doc-Fix?”

Image:Freedigitalphotos.net/samarttiw
Image:Freedigitalphotos.net/ samarttiw

Before passage, MACRA was labeled as a “doc-fix” for the SGR. Its goal was to prevent healthcare providers from opting out of Medicare for funding concerns with reimbursements. Originally, a joint-venture was purposed between House Speaker John Boehner and Democratic Majority Leader Nancy Polesi, as reported on by US News, MACRA was eventually passed in the Senate and House of Representatives. Furthermore, the law provides for $70 million in budget cuts and guarantees funding for Medicare through 2025.

How Does MACRA Impact Performance Incentive Programs?

Image:Freedigitalphotos.net/StuartMiles
Image:Freedigitalphotos.net/ StuartMiles

Under MACRA, the three, pre-existing merit-based payment programs are combined into a single merit-based incentive payment (MIP) methodology. Under these guidelines, most healthcare providers, such as clinical nurse specialists, certified registered nurse anesthetists, nurse practitioners, physician assistants, and physicians, will receive payment based on the outcome of given healthcare measures.

For example, a patient with successful treatment for COPD will garner a higher reimbursement payment to his healthcare providers. However, the new MIP system provides exceptions for healthcare providers opting into the alternative payment model (APM). Starting in 2026, Medicare payments to non-APM providers will increase and decrease by 0.25 percent yearly in accordance with the successful and unsuccessful outcomes of patients.

What About Healthcare Providers Participating in APM Systems?

Image:Freedigitalphotos.net/jesadaphorn
Image:Freedigitalphotos.net/ jesadaphorn

Healthcare providers who participate in APM reimbursement systems will eventually experience increased Medicare payments in 2026. Until December 31, 2019, the updated conversion factor for APM participants will remain at 0.5 percent. From 2020 to December 31, 2025, the conversion factor will drop to 0.00 percent and become stable at 0.75 percent in 2026.
Under MACRA, the Secretary of Health and Human Services will explore means of preventing fraudulent charges for APM participant requests for reimbursement for items and services. Additionally, the Secretary will assess the best means of encouraging participation in APM programs in rural and otherwise remote areas.

How Does MACRA Impact Electronic Health Record Requirements For Healthcare Providers?

Image:Freedigitalphotos.net/Praisaeng
Image:Freedigitalphotos.net/ Praisaeng

The use of an electronic health record (EHR) in healthcare settings provides exceptional benefits to healthcare providers. For example, an EHR gives healthcare providers the ability to see a patient’s full medical history without waiting on extraneous forms and relaying of old data. Within MACRA provisions, the use of EHRs for health information exchange is mandated by the end of 2018.

Additionally, the Secretary of Health and Human Services must work to help healthcare providers in comparison and selection of EHR programs. This represents an additional expense for healthcare organizations that do not already possess an EHR system. Therefore, having a guaranteed form of payment for Medicare patients helps ensure healthcare organizations meet the EHR requirement.

Goodbye, Medicare Budget Concerns

Although not mandated by MACRA, some healthcare organization may actively search for computer programs to automatically calculate their merit-based scores for reimbursement payments. Fortunately, the hypothetical concerns over what a repeal of the Medicare Sustainable Growth Rate have been laid to rest with the passage of the Medicare Access and CHIP Reauthorization Act of 2015. Now, healthcare providers and organizations know what they must do to continue providing services to Medicare patients and receive needed reimbursement payments.