Hospital and physician groups applauded yesterday’s Senate vote to repeal Medicare’s sustainable growth rate formula for paying physicians. The Medicare Access and CHIP Reauthorization Act, approved 92–8 and previously OK’d by the House of Representatives, replaces the SGR with annual payment increases of 0.5 percent starting July 1 and continuing through 2019.

According to Kaiser Health News, the measure encourages better care coordination and chronic care management, and rewards providers who receive a “significant portion” of their revenue from an “alternative payment model” or patient-centered medical home with a 5 percent payment bonus.

Rich Umbdenstock, president and CEO of the American HospitalAssociation, commended the structural reforms to the Medicare program included in the legislation. “It fixes the physician payment problem and includes policy changes that move their payments to reflect the transformation happening in health care that hospitals already have embraced.”

James L. Madara, M.D., executive vice president and CEO of the American Medical Association, said in a statement, “Passage of this historic legislation finally brings an end to an era of uncertainty for Medicare beneficiaries and their physicians — facilitating the implementation of innovative care models that will improve care quality and lower costs.”

The Medical Group Management Association was equally enthusiastic. “This is a historic day — the dark cloud over physician group practices has been lifted,” said MGMA President and CEO Halee Fischer-Wright, M.D., in a statement.

While the SGR repeal won nearly universal praise from providers, Umbdenstock said the AHA will continue to push issues not included in the final bill, including “broad-based RAC reform and a sociodemographic adjustment to the readmissions penalty program, along with corrections to regulatory issues like the critical access hospital 96-hour rule and physician supervision for outpatient therapy.”

Kaiser Health News’ Mary Agnes Carey put together “FAQ: Congress Passes a Bill to Fix Medicare’s Doctor Payments. What’s in It?” that you will find helpful.