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Beyond the SGR: Alternative Models

Friday, January 24, 2014

Congress is as close as it has ever been to scrapping the Medicare sustainable growth rate (SGR) for an alternative system of paying doctors based on the quality - rather than the quantity - of services.

The SGR system has been in place since 1997, and every year since 2002 Congress has passed legislation to temporarily delay reductions in physician payments. In December, Congress passed only a three-month stay on a scheduled 24 percent cut to give lawmakers time to fashion a permanent fix to the flawed payment system early in 2014.

The briefing examined alternative payment and delivery system models that have promise as replacements.

Should physicians participating in alternative delivery systems and who demonstrate better value receive larger payments? How much larger? What about physicians who do not improve value or efficiency? How should they be measured and how much less should they be reimbursed? How should Congress finance a repeal of the SGR, which the Congressional Budget Office estimates could cost could cost $175 billion over 10 years.

Gail Wilensky, senior fellow, Project HOPE, discussed her recent paper on developing a viable alternative to the SGR.

David Share, senior vice president, Blue Cross Blue Shield of Michigan, described his health plan’s incentive program for physicians that bases payments on value.

Mark McClellan, senior fellow and director of the Health Care Innovation and Value Initiative, Brookings Institution, assessed various payment models for physicians.

Ed Howard of the Alliance and Stuart Guterman of Commonwealth moderated the discussion.

Contact: Marilyn Serafini (202)789-2300

Follow the briefing on Twitter: #SGRfix

The event was sponsored by the nonpartisan Alliance for Health Reform and The Commonwealth Fund.

Transcript, Event Summary and/or Webcast and Podcast

Transcript: Transcript (Adobe Acrobat PDF), 1/24/2014
Full Webcast/Podcast: Full Video

Speaker Presentations

Guterman Presentation (Adobe Acrobat PDF), 1/24/2014
Wilensky Presentation (Adobe Acrobat PDF), 1/24/2014
Share Presentation (Adobe Acrobat PDF), 1/24/2014
McClellan Presentation (Adobe Acrobat PDF), 1/24/2014

(If you want to download one or more slides from these presentations, contact us at info@allhealth or click here for instructions.)

Source Materials

Agenda (Adobe Acrobat PDF), , 1/24/2014
Speaker Biographies (Adobe Acrobat PDF), , 1/24/2014
Materials List (Adobe Acrobat PDF), , 1/24/2014
Selected Experts (Adobe Acrobat PDF), , 1/24/2014

Offsite Materials (briefing documents saved on other websites)

BCBSM Value Partnerships: Transforming Health Care, Value Partnerships, 6/20/2013
Developing a Viable Alternative to Medicare’s Physician Payment Strategy, Health Affairs, 12/11/2013
Emerging Consensus on Medicare Physician Payment Reform: A Golden Opportunity, The Commonwealth Fund, 11/25/2013
Improving Value in Medicare with an SGR Fix, New England Journal of Medicine, 1/8/2014
Medicare Physician Payment: It's Time for Real Reform, The Commonwealth Fund, 11/3/2011
Medicare Physician Payment Reform: Will 2014 be the Fix for SGR?, The Journal of the American Medicine Association, 1/13/2014
Michigan’s Physician Group Incentive Program Offers a Regional Model for Incremental ‘Fee for Value’ Payment Reform, Health Affairs, 9/5/2012
Paying for Value: Replacing Medicare’s Sustainable Growth Rate Formula with Incentives to Improve Care, The Commonwealth Fund, 3/1/2013
AMA Physician Payment Reform Proposal (Adobe Acrobat PDF),American Medical Association, 12/1/2013
Congress is Poised to Change Medicare Payment Policy. What does this mean for Patients and Doctors?, Kaiser Health News, 1/16/2014
Congress Poised to Permanently Fix Its Medicare Payment Glitch, National Public Radio, 12/19/2013
CBO Estimate: HR 2810 (Adobe Acrobat PDF),Congressional Budget Office, 9/13/2013
Cost Estimate for Amendment to H.J. Res 59 for SGR Reform Act of 2013 (Adobe Acrobat PDF),Congressional Budget Office, 12/11/2013
Fact Sheet: Medicare Sustainable Growth Rate System (Adobe Acrobat PDF),Medicare Payment Advisory Commission, 3/1/2012
Letter to Committee Chairmen (Adobe Acrobat PDF),American Hospital Association, 11/12/2013
Medicare's Sustainable Growth Rate: Principle's for Reform, Heritage Foundation, 7/18/2013
Preliminary Estimate for the SGR Repeal and Medicare Beneficiary Access Improvement Act of 2013 (Adobe Acrobat PDF),Congressional Budget Office, 12/11/2013
Bipartisan Proposal from House, Senate Would Repeal SGR, American Academy of Faimily Physicians, 11/6/2013
Goodbye SGR! Hello PCMH and P4P!, American College of Physicians Advocate Blog, 11/1/2013
Issue Brief: Understanding the SGR. Analyzing the ‘Doc Fix’ (Adobe Acrobat PDF),Deloitte Health Solutions, 10/29/2012
Letter to Committee Chairmen (Adobe Acrobat PDF),Federation of American Hospitals, 6/10/2013
Medicare Patients’ Access to Physicians: A Synthesis of Evidence, Kaiser Family Foundation, 12/10/2013
Medicare Payments to Physicians, Health Affairs, 2/13/2013
Option: Address the Sustainable Growth Rate (Physician Payment) Formula (Adobe Acrobat PDF),AARP Public Policy Institute, 6/8/2012
SGR: Data, Measures and Models; Building a Future Medicare Physician Payment System (Adobe Acrobat PDF),Subcommittee on Health Committee on Energy and Commerce US House of Representatives , 2/14/2013
The Sustainable Growth Rate Formula for Setting Medicare’s Physician Payment Rates (Adobe Acrobat PDF),Congressional Budget Office, 11/6/2006
Beyond the SGR: Alternative Models (Adobe Acrobat PDF),Alliance for Health Reform, 1/24/2013
Cost estimate: HR 2810 House Ways and Means (Adobe Acrobat PDF),Congressional Budget Office, 1/24/2014
- This is a CBO cost estimate of the House Ways and Means Committee-approved bill to repeal and replace the SGR.
Cost estimate: S 1871 (Adobe Acrobat PDF),Congressional Budget Office, 1/24/2014
- This is a CBO cost estimate of the Senate Finance Committee-approved bill to repeal and replace the SGR formula.


We have medical care system instead of health care system, there needs to be a multi-disciplinary approach to care, David Share, senior vice president, Blue Cross Blue Shield of Michigan, stated at a January 24 Alliance briefing, Beyond the SGR: Alternative Models.

Value is not just clinical outcomes, but also how patients feel about their care, Gail Wilensky, senior fellow, Project HOPE, stated at a January 24 Alliance briefing, Beyond the SGR: Alternative Models.

There is a mismatch between payment/reimbursement from Medicare and what physicians really want to do to help patients, Mark McClellan, senior fellow and director of the Health Care Innovation and Value Initiative, Brookings Institution, stated at a January 24 Alliance Briefing, Beyond the SGR: Alternative Models.


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