The Medicare “Doc Fix” Will Get Pegged to Quality Measures

We’re hearing from friends on the Hill that Republican staff on the Energy and Commerce Committee are thinking about attaching a pay-for-performance system to any fix of the Medicare Sustainable Growth Rate.  The new approach would cost less than a straight fix of the SGR, which will slash Medicare payments to doctors by 29 percent at the end of the year if Congress doesn’t intervene.

It’s still early in its development, but we heard that after a year or two freeze in payment rates, a new, tiered system would be implemented. Physicians in ACOs would get the highest pay rate, followed by doctors in fee-for-service Medicare who meet performance standards, followed last by docs who don’t.

There’s huge issues all over the concept — but I like it.  And it has an air of inevitability all over it.  It will cost close to $300 billion to permanently fix the SGR.  There’s no way Congress is going to lay down that kind of money without some stiff expectations on quality in return.  And it could finally have the effect of breaking the curse that is fee-for-service reimbursement in Medicare — the root of all evil in the program’s cost explosion. 

And remember: if Congress doesn’t intervene on the SGR, that 29% hit on docs’ rates will translate into a 7% whack on Medicare Advantage payments in 2013.  It’s imperative for both sides of the program that Congress get this done.  Stay tuned.