SGR is Fixed! What's Next?

By Mary Witt, MSW, Senior Vice President, The Camden Group

sgr.pngThe Medicare Access and CHIP Reauthorization Act (“MACRA”) became law last month, and the repeal of the of the sustainable growth rate formula (“SGR”) was official. As important, MACRA reinforces Medicare’s move away from fee-for-service and into pay for value. The major impact on medical groups includes:

  • Provides a 0.5 percent annual update to Medicare rates from 2015 through 2019.
    • The 2015 update will occur July 1, 2015.
  • Moves all providers (physicians, nurse practitioners, clinical nurse specialists, midwives, certified registered nurse anesthetists, and physician assistants) into value-based payments in 2019, either through the Merit-Based Incentive Program (“MIPS”) or through bonuses for participation in an Alternative Payment Methodology (“APM”). All providers will be incentivized through MIPS if they do not qualify for bonuses under APM.
  • MIPS consolidates and streamlines current Medicare quality programs (Physician Quality Reporting System [“PQRS”], Meaningful Use, and the value-based payment modifier and sunsets the penalties associated with each of the current programs in 2018.
    • MIPS will reward providers based on performance in four categories: quality, resource use, meaningful use, and clinical performance improvement.
    • It creates a composite score based on the four categories and, depending on how it compares with a performance threshold (based on the mean composite score of all eligible professionals), eligible providers will receive a bonus, a penalty, or no adjustment in payment. Those scoring in the lowest quartile will receive a penalty and bonuses will be proportional depending upon the score.
  • Provides a five percent bonus for 2019 to 2024 for eligible professionals who are a “qualifying APM participant.”
    • Qualifying APM categories include accountable care organizations, patient centered medical homes, bundled payments, or other models developed by the Centers for Medicare and Medicaid Services (“CMS”).
    • In 2019, a qualifying APM participant must have at least 25 percent of payments attributed to services furnished under an eligible APM. It increases to 50 percent in 2021, and 75 percent in 2023 and beyond.
  • Reverses CMS’ decision to eliminate the use of 10- and 90-day global day surgical codes.

So Does MACRA Mean We Don’t Need to Do Anything Different?

The answer is a resounding "NO!"  

This legislation is another signal that payers have moved away from fee-for-service to pay for value, and medical groups need to assess their readiness and act now. Waiting until the payment methodology changes is too late. Instead, medical groups must begin the work of redesigning their practices now to be successful in the future.

Must Dos

  • Improve patient access to increase patient satisfaction and prevent leakage to new competitors
  • Maximize operational efficiency
    • Analyze your performance on quality and cost and develop a performance improvement action plan now
    • Document and assess your current work flows for all key practice processes:  check-in, check-out, physician visit, and visit discharge to identify waste, barriers, duplication, and missing steps
    • Maximize patient throughput
    • Develop work flows to effectively use team members to maximize physician effectiveness
    • Optimize electronic health records utilization
  • Re-examine your physician compensation plan and add incentives for quality, patient satisfaction, and efficiency
  • Use the current Medicare value-based payment initiatives to help you build the foundation for success under MIPS
    • Participate in PQRS

witt_headshot.pngMs. Witt is a senior vice president with The Camden Group and has over 25 years of healthcare experience. She has held management positions in hospitals, health systems, and management services organizations (MSOs). She has extensive experience in medical group and integrated delivery system development and management. This includes developing patient-centered medical homes, practice management, performance improvement, physician compensation, managed care, strategic planning, healthcare marketing, and physician recruitment. Ms. Witt leads medical group development, performance improvement, and turnaround projects for integrated delivery systems, medical groups, and academic residency programs throughout the country. She may be reached at or 424-201-3971.

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