Healthcare News & Insights

SGR fix could mean more incentives, better health IT

Congress has finally introduced a bill to reform Medicare’s sustainable growth-rate (SGR) formula. But what would this new legislation mean for providers’ finances? 

451038207For years, Republicans and Democrats have been unable to agree on how to reform the formula the Centers for Medicare & Medicaid Services (CMS) uses to determine reimbursement rates.

However, as of now, the ‘doc fix’ bill, H.R. 1470, has been introduced into the House of Representatives and has received support from both parties, making it likely to be passed into law.

This is good news, as the last “doc fix” was due to expire at the beginning of April, and would have reduced payment rate for hospitals and other providers by 21%.

But, if passed, the SGR Repeal bill would do more than just prevent reimbursement cuts.

Consolidation and incentives

In fact, the bill has several big implications for health IT and provides new opportunities to earn incentives.

The new payment system the bill proposes consolidates several incentive systems CMS already has in place, such as the meaningful use program, the physician quality reporting system and the new value-based modifier.

If passed, the SGR bill would:

  • move away from penalizing providers for not meeting meaningful use criteria
  • offer providers chances to earn financial bonuses for meeting meaningful use standards
  • ask providers to prove that they haven’t willfully restricted data-sharing among electronic health records (EHRs)
  • expand coverage for telehealth services and remote monitoring through alternative payment models
  • give incentives for using telehealth and remote monitoring by including them as clinical practice improvement activities, and
  • push providers to use EHRs, regardless of their eligibility for the meaningful use program, to streamline reporting quality measures.

Improving interoperability

Additionally, the bill has several provisions aimed to improve interoperability among providers and their EHRs.

For example, the bill would require the Department for Health and Human Services (HHS) to create a study comparing EHRs, and to create metrics by 2016 to track how much progress has been made toward wide-spread interoperability among hospitals and other providers.

And if a certain level of progress hasn’t been met, the bill requires HHS to create a report about what barriers prevent interoperability and how to address them. HHS would also have to make a report evaluating how other payors are promoting  remote monitoring and telehealth providing.

Preparing for the SGR replacement

As the bill goes through committees and both houses of Congress, it’s likely that some provisions could be changed or added to the bill. However, hospital leaders can still expect that the finalized version will still include many of these provisions to improve and expand health IT use.

As a result, execs may want to take a look at their operations now with the goal of meeting the SGR replacement’s new standards down the road.

For example, in order to effectively levarage telehealth services in your operations, you’ll want to examine what kind of conditions are most prevalent at your facility, consider how telehealth could address the needs of patients with those diseases and determine whether physicians and patients have the correct video-conferencing resources to engage in remote conversations.

Likewise, you may want to work with your partners and vendors to determine what barriers prevent interoperability, and what steps you could take to work around those issues.

Similarly, if your facility struggled to meet criteria for stage 2 of the current meaningful use program, you may want to look at the criteria your facility struggled with most and begin looking for ways to address those problems.

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