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November 2014

A “Doc Fix” for the Ages: The Value Proposition of Tomorrow’s Medicare

Author Affiliations
  • 1Warren Alpert Medical School, Brown University, Providence, Rhode Island
JAMA Surg. 2014;149(11):1101-1102. doi:10.1001/jamasurg.2014.395

On February 6, 2014, the chairs and ranking members of 3 congressional committees with jurisdiction over Medicare—Senate Finance, House Ways and Means, and House Energy and Commerce—announced a negotiated bipartisan bicameral agreement on the policy parameters of a bill to permanently repeal and replace the fatally flawed Sustainable Growth Rate (SGR) formula.1 Known as the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (HR 4015/S 2000), the newly introduced bill is hardly limited to the long overdue disposition of the SGR formula.2 Instead, the proposed legislation promises to bring about the most significant reform in Medicare payment policies since the passage of the Balanced Budget Act of 1997 (Pub L 105-33).3 In fact, the proposed legislation seeks nothing less than to transition Medicare away from the time-honored “fee-for-service” payment paradigm to a “fee-for-value” counterpart.1 To accomplish its stated objectives, the proposed legislation propounds to stabilize future annual Medicare Physician Fee Schedule (MPFS) updates, consolidate and thus streamline current law incentive programs, and incentivize participation in “alternative payment models” (APMs).2 In addition, the proposed legislation sets out to promote the development of new quality measures, reward care coordination for chronically ill individuals, and advance evidence-based imaging.2 Finally, the proposed legislation aims to enhance the content of the Physician Compare website and to expand the availability of claims data with an eye toward improving the quality of care.2 It is the objective of this Viewpoint to review the central elements of the proposed legislation, assess its significance, and consider potential strategies for underwriting the costs thereof.

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