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AMA, MGMA letters to lawmakers suggest SGR alternatives

Letters sent last Friday to House Ways and Means Committee chairs Dave Camp (R-Mich.) and Wally Herger (R-Calif.) from the American Medical Association (AMA) and Medical Group Management Association (MGMA) suggest a number of different payment approaches aimed at a long-term solution to the current Medicare sustainable growth rate (SGR).

Both letters were submitted in response to a request from the committee seeking ideas on how to create new payment models.

“There is widespread agreement among experts and stakeholders that the existing physician payment system under the Medicare program is inadequate,” wrote Susan Turney, MD, president and CEO of MGMA. “Although Congress has repeatedly intervened to prevent rate cuts, it has never eradicated the formula that dictates these cuts.”

[See also: Medicare trust fund projected to run dry by 2024]

In the AMA letter, James L. Madara, MD, executive vice president of the AMA, lays out a number of different payment proposals that include rewarding doctors for quality and efficiency, developing new models of payment and suggestions for increasing patient involvement with care decisions while also addressing current regulatory roadblocks.

“Innovative payment models can give physicians the resources and flexibility to re-design care to keep patients healthier, better manage chronic conditions, improve care coordination, reduce duplication of services, and prevent avoidable admissions, and do so in ways that will control costs for the Medicare program,” wrote Madara.

Among the recommendations from the AMA are a request that Medicare create what is essentially a menu of different payment reforms and models during a transition period away from SGR and current fee-for-service payments. The new payment models should be broadened, the letter asserts, from the current shared savings and ACO programs to also include bundled payments, performance-based payments, global and condition-specific payment systems, warranties for care and medical homes.

[See also: MedPAC approves SGR repeal proposal]

Further, application to participate in these programs should be ongoing, not one-time, single-deadline programs.

“To date, those wishing to participate in new Medicare payment and delivery reform pilots have had to respond to requests for applications made available on a one-time basis with a short turnaround time. It is difficult to plan ahead for these announcements and organize the projects and resources necessary for a successful proposal,” Madara noted. “Going forward, opportunities to engage in new models need to be available on an ongoing basis so physicians can plan for the needed changes and join as they become ready.”

The MGMA’s response is similar in scope of the kinds of payment reforms that should be considered while also calling for a great deal of flexibility that would allow physicians and practices to adopt different approaches based on how the individual practice operates, its core competencies and the healthcare needs of the community it serves.

MGMA also showed the stark contrast over the past 10 years of the increases in total operating costs per full-time physician versus the payment increases meted out by Congress in its overrides of the SGR. Since 2001, physicians’ costs have risen an average of 57 percent while the annual Medicare payment updates are only 2.9 percent greater than they were more than 10 years ago.

Finally, MGMA also renewed its call for a revised implementation process for ICD-10. It cited the current problems that have plagued the transition of HIPAA 5010 as proof, especially since the transition to ICD-10 should be more complex.

“It is critical that the government and industry stakeholders work together to identify and address concerns and agree on a more appropriate implementation approach. Further, the government should complete and make public a comprehensive cost-benefit analysis to determine the impact the changes to ICD-10 will have on each healthcare industry sector. Failure to perform the necessary due diligence with regard to ICD-10 will almost certainly disrupt future Medicare payment reform efforts,” Turney’s letter concluded.

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