From the Senate perspective the SGRrrr elimination appears less likely this week. As you may recall, Mr. Baucus and the Senate Finance Committee last week proposed a $38 billion, three-year band-aid (a continuation of the past failed approach), but he told me last week at a breakfast meeting that he thinks they can muster together $150 – $200 billion from somewhere (cancellation of the war in Afghanistan?) to get closer to eliminating it. The Administration breakthrough decision to shift the $87 billion of injectable drug costs embedded in SGR from Part B to Part D of Medicare would make the total fix more likely.

The House (Pelosi, et al) still seems committed to look for the complete fix this year, but the Senate doesn’t see how it would be paid for (but hey! If SGRrr goes away, what formula would we use? Why not apply the Medicare Economic Index that the hospitals and the rest of the system use? This seems to provide annual increases that fairly closely approximate increases in the cost of doing business).

Keep in mind that even if Congress finds $280 Billion, physicians would not receive any pay increase over the next 10 years without additional funds. The SGR fix simply eliminates the overt pay cuts. Since business costs nonetheless continue to rise, new payment options for quality are also essential in this reform process. While Baucus insists the Physician Quality Reporting Initiative (PQRI) must continue, the quality improvement bonus attached in the current proposals are likely to be no more than 2 percent, hardly enough to motivate the extra work hours and workflow changes practices need to accomplish to effectively participate.

The ACC and IHI (Institute for Healthcare Improvement) Hospital-to-Home (H2H) project is generating great interest. This may be the kind of direction — one that unfortunately most of our members do not yet appreciate — that is the only pathway toward needed payment reform and payment increase that could keep pace with rising costs of business for practices. Given the rising tide to create reform this year, we will need some Patrick Henrys to ride through all of our chapters and states to let people know big change is coming -- and won’t be a tweak of the status quo. Reform doesn’t necessarily have to come out badly -- but need to make sure we stay at the table.

*** Image from Flickr (vtengr4047). ***

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