It's Time to Repeal the SGR and Reduce Medicare Red Tape

It’s time. After 12 years, annual escalating fee-cut threats and fiscal patches have never addressed the underlying threat to patient care. It’s time to repeal the Sustainable Growth Rate (SGR) formula.

TMA supports the SGR Repeal and Medicare Provider Payment Modernization Act (H.R. 4015/S. 2000). It accomplishes these five critical goals 

  • Permanently eliminates the SGR. This is critical and long overdue.
  • Provides modest automatic positive payment updates for physicians. Physician practices have languished over the past decade under funding patches that have not reflected the growth in practice costs and additional state and federal requirements being placed on physicians. While it is doubtful that these updates will keep up with physicians’ cost of providing health care to Medicare patients, the cumulative 2.5-percent update is larger than all of the increases physicians have seen in the past 12 years.
  • Replaces myriad quality measurement programs — with their varied penalties and limited incentives — with one to be based on clinically driven and physician-developed metrics.
  • Helps to limit the establishment of new causes of action against physicians that would add further uncertainty to the management of physicians’ practices.
  • Reduces the ongoing administrative hassles for physicians who opt out of Medicare to engage in private contracting with their patients.  

Moving Forward — TMA’s Ongoing Concerns

While we applaud this bipartisan and bicameral response, we recognize that many issues have been shoved aside over the past decade. This law will improve Medicare patients’ access to quality care only if the onerous and expensive regulatory burden is lifted from their physicians’ backs. Whether in H.R. 4015/S. 2000 or moving forward, Congress must address these issues:

Ensure physician participation in the new technical advisory committee. Currently the legislation appoints a technical advisory committee to review physician-developed quality measures and alternative payment models and then recommends which of these should be used. Physicians and their organizations must play a central role in this process. Practicing physicians must play a leading role on the Technical Advisory Committees, not just recommend items for consideration.

Create fair and constructive APM and MIP incentive programs that don’t harm physicians’ practices. Congress must continue to ensure the payment pool for bonuses and penalties in the Medicare Integrity Program (MIP) is not budget neutral. Congress also must ensure that any bonus and penalties resulting from this and from the Advance Payment Model (APM) program treat all physicians fairly. We believe Congress should focus on encouraging and incentivizing physicians who participate in these programs and recognize that penalties disproportionately impact small practices. Before implementing any of the new incentive-pay programs, Congress must ensure (1) the measures and standards used do not result in financial penalties for physicians when their patients do not comply with recommended tests and treatment; (2) physicians are not penalized for providing services to disadvantaged patients; (3) physicians are not penalized for noncompliance with obsolete or superseded guidelines and standards; and (4) both cost and quality measures are adequately risk-adjusted to eliminate the effects of poverty, poor educational attainment, and cultural differences.

Revise and/or Eliminate the Adoption of the ICD-10 Coding System.

 Implementing the massive changes in the International Classification of Diseases, 10th revision, (ICD-10) by Oct. 1, 2014, will bring about confusion and extraordinary burden, particularly to small practices and primary care physicians. The Centers for Medicare & Medicaid Services (CMS) should, at a minimum, beta-test this system among a variety of practice types and locations to make sure it actually works. Even more appropriate would be to repeal the ICD-10 coding system for physician practices altogether and gear up for ICD-11, which is right behind.  

Maintain State-Based Quality QIOs

The mission of the quality improvement organization (QIO) program is to improve the effectiveness, efficiency, and quality of services delivered to Medicare patients. The Texas Medical Foundation (TMF) has served as Texas’ QIO since 1984. TMF works side by side with physicians, provider organizations, stakeholder groups, and other local community entities to improve care and reduce costs for Texas patients. 

Currently there is congressional effort to eliminate state-based QIOs, which would drastically undermine both the due process and the peer review afforded to Texas physicians participating in Medicare. Eliminating TMF would allow physicians from other states, not licensed by the Texas Medical Board and without knowledge of the standard of care in Texas, to review Texas physicians. Additionally, allowing regional provider associations to serve as the Texas QIO would pose an inherent conflict of interest and jeopardize the independent review currently in place.

The regional QIO model proposed in legislation will result in separate contractors managing the case review business and the quality improvement business. If this legislation passes, the opportunity for quality improvement based on peer review findings will be compromised. Physicians also would have to spend more money and time dealing with separate organizations for case review and quality improvement with no guarantee of improved patient care or efficiency. For these reasons, TMA urges you not to support the regionalization of the QIO process. The current state-based system works and accomplishes the QIO mission.

Reform Recovery Audit Program Bounty-Hunting Practices

CMS currently has several contractors to review and audit medical delivered by doctors — Recovery Audit Program contractors (better known as RACs), zone program integrity contractors, Comprehensive Error Rate Testing contractors, and Medicare administrative contractors. It’s confusing, burdensome, and expensive for physicians to work with so many audit programs administered by multiple contractors and defend their medical decisions — especially when many of the RAC claims are erroneous. In fact, the Department of Health and Human Services’ (HHS) Office of Medicare Hearings and Appeals recently announced it would no longer accept any provider requests for Administrative Law Judge review, which is the third level of administrative review in the Medicare appeals process. Citing a backlog of 357,000 cases, HHS said it would not accept new appeals for up to two years. RACs are costing physicians’ practice time and money, and taking their time away from patient care.

Here are just a few of the problems with the existing Recovery Audit Program: 

  • RACs are bounty hunters. They receive a healthy commission on every claim they deny. 
  • RACs don’t have a medical license. Personnel with little to no expertise in medical care conduct the reviews, and overpayment determinations are being overturned at an alarming rate. Only physicians should be allowed to make the determination if a physician service was a medical necessity.
  • RACs are not held accountable. They should be penalized for erroneous overpayment determinations, and should be required to reimburse physicians for the costs incurred in defending against a recovery audit whenever an appeal is won. According to CMS, 43 percent of the time when a heath provider appeals a recovery audit overpayment claim, the health care provider wins. Physicians should not bear the cost of legal and administrative fees to pursue appeals, especially when they win the appeal. 
  • Extrapolations should not be allowed by RACs. RACs should not base their findings on a statistical sample of claims, which is not always an accurate assessment of a physician’s coding and documentation. Instead they should review physicians’ claims – claim-by-claim. 


Last Updated On

July 10, 2018