Skip to content Skip to navigation

How Would Proposed SGR Repeal Impact Meaningful Use Program?

February 7, 2014
by David Raths
| Reprints
Penalties for not meeting meaningful use requirements would sunset after 2017

As has been widely reported in the healthcare press, on Thursday U.S. House and Senate negotiators announced they have reached agreement on legislation to repeal the Medicare Sustainable Growth Rate Formula. The Senate Finance Committee and the House Ways and Means and Energy and Commerce committees worked together on the SGR Repeal and Medicare Provider Payment Modernization Act. If passed by Congress and signed by President Obama, it could have a significant impact on the federal EHR incentive program and other quality reporting efforts. The bill seems to seek to address provider requests for streamlining of quality reporting initiatives.

As Jeff Smith, director of public policy for the College of Health Information Management Executives (CHIME), explained to me in a brief e-mail exchange, under this bill meaningful use would become part of a “bundling” of value-based programs. Essentially, meaningful use status (successful attester or unsuccessful) would become one of three or four things that would be referenced as part of the new performance incentive program, Smith explained.

The current penalties would go away after 2017, if this bill passes, and then the penalties associated with not being a meaningful user would be part of a formula, which includes the Physician Quality Reporting System (PQRS) and Value-Based Modifiers.

Here is a brief summary of the aspect of the bill focused on incentive programs and quality reporting:

The proposed law would create a “Merit-Based Incentive Payment System” (MIPS) that would consolidate the three existing incentive programs, continuing the focus on quality, resource use, and meaningful electronic health record (EHR) use with which professionals are familiar but in a cohesive program that avoids redundancies.

Payments to professionals would be adjusted based on performance in the unified MIPS starting in 2018. The MIPS streamlines and improves on the three distinct current law incentive programs: the Physician Quality Reporting System (PQRS), the Value-Based Modifier that adjusts payments based on quality and resource use in a budget-neutral manner and the meaningful use of EHRs.

The payment implications associated with the current law incentive program penalties are sunset at the end of 2017, including the 3 percent (increasing to 5 percent in 2019) penalty for failure to meet meaningful use requirements. The money from penalties that would have been assessed would now remain in the physician fee schedule, significantly increasing total payments compared to the current law baseline.

The MIPS will assess the performance of eligible professionals in four categories: quality, resource use, EHR Meaningful Use, and clinical practice improvement activities. Current EHR Meaningful Use requirements demonstrated by use of a certified system will continue to apply in order to receive credit in this category. To prevent duplicative reporting, professionals who report quality measures through certified EHR systems for the MIPS quality category are deemed to meet the meaningful use clinical quality measure component.

Professionals will receive a composite performance score of 1-100 based on their performance in each of the four categories. Scoring weights may be adjusted as necessary to account for a professional’s ability to successfully report on such category measure or activity and to ensure that individuals are measured on an equitable basis. The bill’s language calls for funding of $15 million annually in 2014 to 2018 for professional quality measure development, and the funding will remain available through fiscal 2021. The Secretary will contract with entities to develop priority measures and focus on measures that can be reported through an EHR.

Healthcare Informatics will follow up with more reporting on the potential impact of the bill.