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AAOS Now

Published 5/1/2015

Key Provisions of HR 2

Repeals the SGR and ends the annual threat to seniors’ care, while instituting a 0.5 percent payment update each year for 5 years.

Reverses the global payments policy announced in the 2015 PFS Final Rule. CMS wanted to convert all 10- and 90-day global payments to 0-day payments for surgical services; HR 2 prohibits this action.

Streamlines Medicare’s existing quality programs into one value-based performance program. The legislation consolidates the existing Physician Quality Reporting System (PQRS), Value-Based Modifier, and Meaningful Use of Electronic Health Records (EHR) programs, which will remove many of the reporting burdens faced by physicians.

Enables input by professional organizations, physicians, and other relevant stakeholders to identify and submit quality measures and updates to be considered for selection and used in the performance program, thus promoting collaboration.

Improves the payment adjustment scheme to reduce penalties and increase incentives. Currently, physicians face a web of regulatory requirements and penalties that detract from patient care and threaten the financial viability of their practices. For example, in 2019, total potential payment cuts under PQRS, Value-Based Modifier and EHR could equal up to
11 percent.

PENALTIES: Under the proposed legislation, however, the penalty for the combined program will be capped at 4 percent in 2019, 5 percent in 2020, 7 percent in 2021, and 9 percent in 2022. Eligible professionals will receive payment adjustments in proportion with their performance below the threshold.

BONUSES: Eligible professionals above the performance threshold will receive an incentive payment up to three times the cap for penalties. An additional threshold is available for exceptional performance. Aggregate additional incentive payments will be capped at $500 million per year for each of 2019 through 2024.

Provides greater flexibility for physicians to meet quality program standards. For example, physician options to qualify for quality measures will include EHRs, qualified clinical data registries maintained by physician specialty organizations, and the option to be assessed as a group, as a “virtual” group, or with an affiliated hospital or facility. The legislation also provides $20 million annually from 2016 to 2020 for technical assistance and to help practices with 15 or fewer professionals, especially those in rural or underserved areas, improve quality performance or transition to alternative payment models (APMs).

Incentivizes use of APMs to encourage doctors to focus more on coordination and prevention to improve quality and reduce costs.

Expands availability of Medicare data by allowing qualified clinical data registries to purchase claims data for purposes of quality improvement and patient safety. Qualified entities will be able to analyze and redistribute Medicare data with a voluntary fee.

Clarifies “standard of care” by stipulating that development of any quality or clinical guideline in Medicare or through other laws cannot be construed to establish a standard of care or duty of care.

Addresses interoperability by establishing a July 2016 deadline for the Department of Health and Human Services (HHS) to develop metrics to quantify progress toward more data-sharing among hospitals and other providers. HHS would have to account for the progress by December 2018.