Home > EHR, meaningful use, Medicare > SGR and Value Based Performance: The Umbrella Carrot-and-Stick Program

SGR and Value Based Performance: The Umbrella Carrot-and-Stick Program

On October 30, the Senate Finance and House Ways and Means Committees released a bipartisan, bicameral discussion draft paper titled “SGR Repeal and Medicare Physician Payment Reform.” The draft proposes a framework for a permanent Sustainable Growth Rate (SGR) formula fix, encourages alternative payment models, and aligns various Medicare incentive programs, including the EHR Incentive Program (“meaningful use” or MU). The purpose of the proposal is to solicit comments from the public.

In terms of MU and various other incentive programs, the proposal would rework the imminent penalties and reintroduce incentives in an interesting way beginning in 2017. There would be an umbrella Value Based Performance (VBP) Payment Program based on a “composite score” determined by a physician’s compliance with MU, PQRS/quality, Value Based Modifier/resource use, and clinical practice improvement activities (including participation in Medicare Alternative Payment Models, work in federal Health Professional Shortage Areas, and so on). A high or low composite score will determine whether the physician is incentivized or penalized for VBP as opposed to individual program penalties. The funding pool created by payment reductions to those with low composite scores will be used to pay incentives to those with high composite scores. The penalties and incentives will amount to 8% Medicare payments in 2017, 9% in 2018, and 10% in 2019. After 2019, the funding pool can be increased, but not lowered, by HHS.

While each of the components of the composite score are weighted to a certain percentage (MU, for example, would be up to 25% of the composite score if fewer than 75% of eligible professionals are compliant), the draft proposal does not address what “high” or “low” composite scores specifically are. For example, would 50% of physicians be incentivized while 50% are penalized, or would it scale like the Value Based Modifier system where only the outliers are penalized? The future legislation will likely address these and other details.

Note that the discussion draft covered other subtopics beyond the aforementioned VBP program. The most exciting of the proposals for radiology was the inclusion of appropriateness criteria-guided decision making for physicians who order diagnostic imaging. See the American College of Radiology’s website for more information.

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Categories: EHR, meaningful use, Medicare
  1. July 30, 2014 at 5:30 pm

    Very nice article,just what I needed.

  1. February 20, 2014 at 11:26 am

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