SGR Replacement Bill Has Big Implications for Health IT

Senate and House lawmakers introduced bipartisan, bicameral legislation (HR 1470) to permanently replace Medicare's sustainable growth rate formula that includes several health IT provisions, Modern Healthcare reports (Tahir, Modern Healthcare, 3/19).


Congress last year approved a short-term delay to scheduled reductions to Medicare physician reimbursement rates called for by the SGR. Providers face about a 21% reduction in Medicare reimbursement rates unless Congress acts by April 1, 2015 (Hughes, Wall Street Journal, 3/19).

Meaningful Use Provisions

The new legislation would replace the SGR with a merit-based incentive payment system that would consolidate several federal incentive programs, including the meaningful use program, physician quality reporting system and value-based modifiers, into one value-based payment reporting system.

Under the 2009 economic stimulus package, providers who demonstrate meaningful use of certified electronic health records can qualify for Medicaid and Medicare incentive payments.

Specifically, the SGR replacement measure would:

  • Sunset meaningful use penalties (Gold et al., "Morning eHealth," Politico, 3/20);
  • Make eligible professionals who meet the program criteria eligible for a bonus (Modern Healthcare, 3/19);
  • Require eligible professionals to demonstrate that they have not "knowingly and willfully taken action ... to limit or restrict the compatibility or interoperability of the certified EHR technology"; and
  • Encourage medical professionals to use EHRs even if they are not eligible for the meaningful use program via incentives, such as streamlined reporting of quality metrics (Goedert, Health Data Management, 3/20).

Interoperability Provisions

The legislation also would mandate that HHS work with stakeholders to develop measures to quantify interoperability by July 2016 ("Morning eHealth," Politico, 3/20).

Further, the bill would "declar[e] it a national objective to achieve widespread exchange of health information through interoperable EHR technology nationwide by December 31, 2018" (Health Data Management, 3/20). If widespread interoperability is not achieved by the end of 2018, HHS would be required to report to Congress by the end of 2019 on the barriers to achieving the objectives and related recommendations.  

Additional Health IT Provisions

The bill also would:

  • Clarify that Medicare is able to pay for telehealth services in alternative payment models ("Morning eHealth," Politico, 3/20); and
  • Incentivize telehealth services and remote patient monitoring by including them as clinical practice improvement activities (Modern Healthcare, 3/19).

In addition, the legislation would call for several reports, including:

  • A study by HHS on ways to potentially assist providers with comparing EHR systems, which would be due in one year ("Morning eHealth," Politico, 3/20); and
  • A study by the comptroller general assessing how insurers are encouraging remote patient monitoring and the obstacles to more widespread use of remote monitoring technology in Medicare (Modern Healthcare, 3/19).

The replacement legislation does not mention the ICD-10 transition.


Health IT Now Executive Director Joel White said his group "support[s] interoperability as a national objective and requiring the adoption of interoperability standards by a certain date." However, he said Health IT Now "continue[s] to believe the bill should include enforcement tools for HHS to ensure that if the goal is not reached, [HHS] can take steps to ensure systemic interoperability is achieved quickly."

White added that Congress should pass the SGR replacement bill and then work to pass a draft bill by Rep. Michael Burgess (R-Texas) that "when layered on top of the SGR reforms, [would] help ensure systemic interoperability is achieved quickly" ("Morning eHealth," Politico, 3/20).

Source: iHealthBeat, Friday, March 20, 2015

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