SGR is Dead, Long Live MIPS!

Passed in 1998, the Sustainable Growth Rate (SGR) system had been “patched” 17 times, as it was an orphan system no one wanted to implement. Lobbyists feasted on the ritual maneuvering to defer SGR because no one could justify cutting Medicare physician fees.

In a collision of politics, problems and opportunities, and driven by the Affordable Care Act, the feds have now passed a reasonable interim solutions to the problem of  Medicare physician fees.

Oh, and no delay on ICD-10.

The political bargaining chips included a two year extension for funding CHIP (Children’s Health Insurance Program) and also increases to seniors’ out-of-pocket expenditures. The bill also gives a few years of respite to post-acute care facilities facing reimbursement cuts.

The package fell short on being revenue neutral but provides physicians and Congress with a five year respite from the ridiculous SGR bickering. This issue is not finished though, but it is a starting point on a different path.

Merit-Based Payment Incentive System (MIPS)

The new program starts with a five year fee schedule, with .05% increases each year. No much, but much better than a 21.5% cut. Payments to physicians will be adjust based on MIPS data starting in 2019 and running through 2025.

Key take away – alternate payment systems are coming - fast.

MIPS folds in and improves  three current programs:
1) the Physician Quality Reporting System (PQRS)
2) the Value-based Modifier (VBM), and
3) the EMR meaningful use rules

And what are the pieces of the MIPS puzzle?  Quality, resource use, EMR meaningful use, and clinical practice management headed for alternate payment methods.

So in one fell swoop the feds have folded  many of the pet theories and pet projects for improving results and lowering costs into the new era of MIPS.

Let's not be too cynical, this could work, or at least have some major positive impacts.

The MIPS payment adjustment process is incredibly complicated, too complicated for a brief explanation. The system will push alternate payment methods very hard, and will  push physician risk sharing models.

Make no mistake, this is a giant piloted lab experiment looking for a sustainable model for physician reimbursement. The next ten years are going to be very difficult but very interesting.

The next ten years will be really interesting.