Sustainable Growth Rate (SGR) Repeal and Medicare Provider Payment Modernization Act of 2014

Introduction of H.R. 4015/S. 2000, The Sustainable Growth Rate (SGR) Repeal and Medicare Provider Payment Modernization Act of 2014, was a huge step towards replacing Medicare’s payment formula. The House passed H.R. 4015 on March 24, 2014. This bipartisan legislation permanently repeals the flawed Medicare physician reimbursement formula, averting a pending 24% cut in payments to doctors that treat Medicare beneficiaries. The SGR Repeal and Medicare Provider Payment Modernization Act of 2014 established a new payment system that rewards value and quality over volume, giving physicians positive incentives to improve performance each year. This program is known as the Merit-Based Incentive Payment System (MIPS), a process that combines existing Medicaid incentive programs and creates a composite performance score that will inform a provider’s reimbursement rates based on four performance categories.  The policy implements a process to improve payment accuracy for individual provider services and provides incentives for care coordination efforts for patients with chronic care needs. 

The bill also incentivizes coordination across payers and the transition to new payment models that focus on coordination and patient outcomes by providing a 5% bonus to physicians that provide a substantial portion of their care through alternate payment models (APMs) that include a quality-measurement component and risk of financial losses or a patient-centered medical home. Participants in the program would have to receive at least 25% of their Medicare revenue through an alternative payment model in 2018-2019, and the threshold would increase over time. The policy also provides incentives for private-payer alternative payment models and it establishes a technical advisory committee to review and recommend physician-developed alternative payment models based on criteria developed through an open-comment process. Qualified entities are able to provide analysis and underlying data to providers for purposes of quality improvement, subject to relevant privacy and security laws and to purchase claims data for purposes of quality improvement and patient safety.